First GameStop, next up silver seems to be the message on social media as the precious metal’s price hits a six-month high at just under $29 an ounce and traders look to storm a new market.
“Whether it will be quite so easy to shunt around silver as it was GameStop remain to be seen, especially as Nelson Bunker Hunt and his brothers came a cropper in 1980 when they tried to corner the market for the precious metal, losing billions in the process,” says Russ Mould, AJ Bell investment director.
“Regulatory intervention to cut the degree to which borrowed money (or ‘leverage’ or ‘margin’) could be used to buy silver did for the Hunt brothers and regulators may again find themselves having to address this issue, alongside the use of derivatives, should anyone lose a packet this time around as well.
“You can understand why silver is attracting the attentions of the social media traders who are looking to vent their fury upon, and profit from, short sellers. Allegations about, and fines for, investment banks rigging precious metal markets have abounded for some time. More fundamentally, money supply is surging, markets more generally are watching carefully for any signs of inflation and precious metals are traditionally seen as a potential hedge here.”