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(Kitco News) – Unmatched investor interest in silver continued over the weekend, penetrating the physical market, leaving many traders unable to keep up with demand.
After small stocks such as Gamestop, Blackberry and AMC swarmed, small investors mobilized on social media began to focus on the silver market. Reddit’s Wall Street Bets was one of the leaders of the organized mob with its subreddit discussion: ‘The world’s largest short print $ SLV Silver $ 25 to $ 1000.
The mobilization of retail investors in the silver market has created an impressive move for the precious metal. March’s silver futures prices ended at about $ 27 an ounce on Friday, with a gain of 5%.
In anticipation of a massive open Sunday night, retail investors have been buying physical bullies this past weekend. Many bully traders had to stop processing orders online due to the unprecedented demand in light of price uncertainty.
APMEX, JM Bullion and SD Bullion are currently unavailable in silver.
So if anyone is wondering if @wallstreetbets (#Reddit) has the ability to # silver market, the traders running out, and 34 million $ SLV shares added Friday are the answers that matter. pic.twitter.com/4fE0X2ohoM
– ArcadiaEconomics-Squeeze the Silver Shorts! ?????? (@ArcadiaEconomic) 31 January 2021
Although silver has made significant gains over the past week and may see higher prices as retail investors continue to accumulate in the market, more and more analysts are warning investors to pay attention to this momentum and volatility.
In an interview with Kitco News on Friday, Peter Hug, Global Trading Director of Kitco Metals, said that although there are sufficient stocks of silver investment products, the COVID-19 pandemic has caused a shortage of smaller coins and rods, hence this revival in demand the physical market puts a lot of pressure.
He added that he fundamentally expects silver prices to move higher, and that investors should be cautious in the current environment.
“I think gold at $ 27 offers long-term value, but I think investors should be careful to pursue the story,” he said.
Other market analysts agree with the same sentiment. Ole Hansen, head of commodity strategy at Saxo Bank, said that although silver made significant profits last week, the film did not fall outside the average volatility of the market. He added that investors and traders still need to keep an eye on key technical levels, with a strong resistance of around $ 28 per ounce.
“Silver prices have made a big move, but the price action has not broken any major trends yet, so we have to wait and see how much momentum this market has,” he said.
While silver may be higher in the short term, Hansen said he does not see enough positioning to create a big push. Hansen added that he is strong about silver; however, he said it would be difficult for the market to maintain profits with gold prices below $ 1,900 per ounce.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views expressed Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, not Kitco Metals Inc. or the author cannot guarantee such accuracy. This article is for informational purposes only. It is not a request to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept the blame for losses and / or damages arising from the use of this publication.