Silver soared over 13% to hit $30 an ounce for the first time since 2013, as the Reddit-inspired frenzy that roiled stock markets last week spills over into commodities.
Last week, a focus by individual investors on shares of relatively small, heavily shorted companies like GameStop, sent their stocks soaring. Now as an army of retail traders started to pile into silver, prices have rocketed to their highest.
Silver futures ended almost 6% higher last week following a jump on Thursday and Friday amid Reddit-fuelled frenzy. Unlike the beaten-up stocks targeted in the equity market, silver’s performed well over the past year, rallying more than 50% as the dollar fell and on expectations for a global recovery from the pandemic.
Most-active futures gained as much as 8.7% to $29.25 an ounce on the Comex, the highest price since September. Gold futures rose as much as 1.1% to hit $1,870 an ounce.
Comments on silver began appearing on the Reddit forum wallstreetbets last week. People argued that banks have been manipulating silver prices, keeping them artificially low, and started to pile into the iShares Silver Trust, the largest silver-backed ETF.
Dealers including Money Metals, SD Bullion, JM Bullion and Apmex said over the weekend they were unable to process orders until Asian markets opened because of unprecedented demand.
Still, Goldman Sachs Group has been positive on silver’s outlook in recent months stating that global demand is now above supply in every major commodity market and described silver as the “bank’s preferred precious metal” as it benefits from both debasement and green energy led industrial recovery.
Silver is typically more volatile than its much more costly sister metal, gold, often posting sharp swings in prices. In addition to its role as a speculative asset and store of value, it has industrial uses, including in solar panels.