Silver prices rose on Monday, reaching an eight-year high.
The rise was possibly linked to the online WallStreetBets community on Reddit, a group of retailers that played a key role in the rise of GameStop last week.
Three experts broke it down.
Jim Cramer, host of CNBC’s “Mad Money”, discusses the complex nature of investing in precious metals, which faces its own limits as a resource.
“People have to admit that silver, although a precious metal, is used mainly for LEDs. It is used a lot for cars, of course a lot for jewelry. If you take it away, you are talking about a market that is very There are only two stocks that really can be invested … Pan American Silver does have 17.5 million silver ounces, but they could not deliver the amount they want to do.They predict 22.5 million this year, that is actually very large.The other one that I find, is, we say, worth investing in, is Wheaton Precious Metals.The stock is huge, they have about 120,000 in ounces a year they plan to put out, and then everyone else is really too small.It’s clear that people use ETFs in silver.I think I’m being misled into recording them? I do think that if you think GDP is going to grow, you might win something in silver, but that’s GDP This is the first thing they targeted that honestly has a li because there is not that much silver.But at the same time, when used, it is not ornamental. Therefore, you really need an increase in the business to make it invaluable. ‘
Mohamed El-Erian, Allianz chief economic adviser, linked the rise to the GameStop short print and how the conflict between retailers and hedge funds could play out.
‘The fact that you can make people look at silver, and in the process look less at GameStop, and therefore there is less concern that the hedge funds that are going to sell short GameStop means that you can influence a lot So do not influence in the short term do not underestimate. About what’s going to happen, look, there’s a big fight going on between three actors, not two. Three: the hedge funds that are short GameStop, the retail investors that are long, and the people in the middle. And the question is where does it go, who has the weakest hand? Who is going to fold first? Who is not going to be able to stay in that trade? Now, historically, what the retail investor was. But the small investors are now more organized … If they can stay organized, they can force the hedge funds to cover more, but today you get the idea that they may not be able to stay organized So we’ll see. The one thing that is systematically worrying is if that falls into intermediate. This is a very different matter as the two sides of the trade fold. ‘
Joe Moglia, former CEO of TD Ameritrade, notes the growth and progress of demographic retail investors.
“Schwab, Ameritrade, E-Trade, even Robinhood are the best interests of the individual. All the business we do with Ameritrade or Schwab is with individuals or financial consultants who work with individuals. So at the end of the day, the tools and the ability that the individual has today, [are] much larger than they had five years ago, and it was much larger than they had five years before that time. So if 2020 was the year in our country where we had many upheavals, and everyone looked at racial, political, sexual, equality, 2021 might be about individual investor equality and they have the tools and the skills to be able to perform these transactions. They do have the tools. They can be taught the skills. But they need better education so that they can understand what the disadvantage is and what their risk is. ‘
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