A gold bar weighing one kilogram sits on top of silver bars on 4 April 2013 at London bully traders Gold Investments.
Simon Dawson | Bloomberg | Getty Images
Futures contracts for silver rose higher on Sunday night as the rise of Reddit in strongly shortened shares appears to be to the metal market.
The silver futures contract was 8% higher shortly after the opening of the futures market, which was the biggest move in the futures contract since at least 2013. The contracts last traded at 6.8%.
The sharp rise higher builds gains for silver and silver-related stocks late last week. Silver mining stocks Coeur Mining and Pan American Silver rose 16.9% and 14.7% respectively on Thursday and Friday. The iShares Silver Trust rose 6.7% during these two sessions.
The increase in demand for silver seems to be related to retailers on the Reddit forum WallStreetBets, which has helped drive trading activity in stocks such as GameStop and AMC Entertainment over the past few weeks.
The forum had several active threads dedicated to silver on Sunday night. The phrase “#silversqueeze” was also popular on Twitter.
The move in silver has been pointed out by investors who are strong on cryptocurrencies such as Bitcoin, which see the new digital assets in part as replacements for traditional metals.
Cameron Winklevoss, co-founder of the cryptocurrency firm Gemini, said on twitter: ‘The consequences of a #silversqueeze can not be underestimated. If it turns out that there are more paper applications on silver than real silver, the payout would not only be huge, but gold next as well. # Bitcoin make it right. “
The dramatic rises in GameStop and other heavily shortened stocks were due in part to short pressures, a phenomenon where investors betting on a stock are forced to buy stocks to cover their positions as the name moves higher. .
Melvin Capital, one of the hedge funds that originally held short positions in GameStop, lost 53% in January.