The Silver Squeeze is a concerted effort by these investors to stop the big bullion banks’ silver market manipulation. By taking delivery on silver futures and purchasing large quantities of physical silver. Their ultimate goal is to “squeeze” the market and increase silver prices. https://www.day-trading.info/buy-bonds-through-a-vanguard-brokerage-account/ SLV is one way to get involved, although you should always be aware of the risks in any kind of short squeeze. To understand the silver squeeze, you first need to know the meaning of a short squeeze. Short-sellers borrow shares of stocks that they expect to drop in price.

Because I had been correctly expecting a serious economic crisis, I have favored safe-haven assets over risk assets such as stocks and real estate. I still believe that these safe-havens will thrive in the years to come as central banks continue to flood the world with liquidity in an attempt to prop-up the debt-ridden global economy. Silver prices recorded two consecutive weeks of gains on Friday, following two back-to-back weeks of losses. The big bull run started on January 28, when the silver open price was $25.26 and the low was $24.86.

1. The idea was to buy into the ETF which would force the fund to allocate new shares and purchase silver to back them.
2. If silver can push above $30 on strong volume, the odds of an even more extensive bullish move will increase.
3. It was shortly after the Reddit-fueled, meme stock saga that the silver market landed squarely in the cross-hairs of the online community.
4. Our ultimate goal is to help extend our award-winning customer service to our educational content.
5. There are rumblings of a potential “silver squeeze” ahead as Reddit traders attempt to replicate last week’s GameStop GME short-squeeze in the silver market.

Many of the home electronics you have probably have the metal in there. And while WallStreetSilver may focus on overcoming price manipulation, increased sales of electronics mean the demand will rise regardless. Some of the biggest recent happenings in the investment world have arisen thanks to users of the Reddit website and app. The insane increases seen in GameStop and AMC share prices had their inception in the WallStreetBets community, and the big news in silver is at least partially attributable to WallStreetSilver.

Is the attempt to force a “silver squeeze” on the futures market viable?

DailyFX Limited is not responsible for any trading decisions taken by persons not intended to view this material. Shortly after the news of a possible silver squeeze there were many posts on the subreddit denouncing this move as members sought to distance themselves from the idea. Despite having a consistent motive to the previous short squeezes – a protest against short-selling hedge Emerging stocks definition funds – there are a number of issues when it comes to shorting the silver market. Nonetheless, it would be unwise to underestimate the purchasing power of retail investors, and the idea of this was clearly demonstrated last week. The task of a short squeeze may be a difficult one, but the fact is that hedge funds are against the ropes while retail traders are throwing the big hooks.

I’d like to buy these 3 bargains for my Stocks and Shares ISA before the FTSE climbs higher

The hashtag “Silversqueeze” is top trending on social media channels, including Twitter and Reddit, and retail traders are buying silver like there is no tomorrow. Silver crossed above the $30 mark earlier today, and silver ETFs experienced a massive inflow on Friday. However, reddit traders need to understand that the silver market is much more liquid than individual stocks like GameStop GME , AMC and Blackberry, which caused real pain for some prominent hedge funds last week.

If this doesn’t happen, “shorts” will have to pay the difference in price. The idea behind WallStreetSilver is that the precious metal is seriously undervalued due to market manipulation. In the minds of many, though, purchasing large supplies of silver could rectify this. Doing so would drive up demand, limit supply and thus make price manipulation more difficult. I believe that chart analysis is a tool that is helpful for determining if a large move is likely ahead in the silver market.

The price of silver rose less than $4 between Friday the 29th of January and Monday the 1st of February. Thereafter, for the remainder of February prices actually dropped below the spike high but remained above the pre-squeeze levels. The first and second silver squeezes were said to have been conducted via the world’s largest silver Exchange Traded Fund (ETF), iShares Silver Trust, which has a $15.97 billion market cap at the time of writing. The idea was to buy into the ETF which would force the fund to allocate new shares and purchase silver to back them. A sharp surge in interest in the ETF would lead to a sudden increase in the demand for silver and likely result in a sizeable increase in the price for the commodity. J.P. Morgan Chase is one of the largest traders of precious metals, so the Reddit user mentioned taking on the banking giant.

If you don’t want to worry about market volatility, however, you’ll want to make sure you’re buying the right silver products. If a lot of new investors rush to buy silver, raising the price, the short-sellers will be forced to buy it back at a much greater price. It’s more complex than that, but this is the bones of a silver squeeze. Gold is a tangible form of money; mining stocks are financial assets that are subject to a host of additional risks besides the market price of gold. That said, sustained bullion buying at elevated levels could very well be the wild card that causes a run on physical silver and a spike in prices. Additionally, one of the most major uses of silver is in the industrial world.

Is There a Silver Squeeze Coming?

For a while in February, silver was the talk of the town in the precious metals world. Internet searches related to buying gold had long dominated similar searches for silver. One look at Google Trends, though, shows that silver overshadowed the yellow metal for an entire week. Its goal is to closely mimic the performance of the price of silver. “Shares of the Trust are not subject to the same regulatory requirements as mutual funds,” according to the iShares site.

Investment demand has been a big driver of physical off-take, and so has silver’s increasing industrial and green energy applications. As such, this has led some to pursue the idea that this may have been a diversion ploy, orchestrated by actual ‘Wall Street’ to derail the momentum and cohesiveness of the online trading community. Jesse is now a popular and controversial financial media personality with over 200,000 social media followers and nearly 10 million views per month on all platforms.

The second silver squeeze or ‘silver squeeze 2.0’ took place on May the 1st – although this fell on a Saturday so much of the price action was captured on May the 3rd. Looking at the chart below this attempt had a more muted effect initially, as price action jumped less than it did the first time around and witnessed significantly lower volume, too. Given that silver prices took out the $30 price level earlier today, the next major psychological resistance is $35 and $40. “There’s far more cash trying to chase physical assets because we’re suffering the bite of inflation, and supply in all of these markets is becoming extraordinarily thin,” explained Eric Sepanek.

As of 1 February 2021, the price of the precious metal has hit a seven-year high at $29.40 (£21.48) per ounce. It’s important to keep in mind that physical precious metals and mining stocks are entirely separate asset classes. What most people don’t realize is https://www.topforexnews.org/brokers/trading-212-cfd-broker-review/ that a similar “raid” already took place in history. During the inflationary period in the 1970s, William Hunt, Lamar Hunt and Nelson Hunt set out to corner the market on silver. They purchased both physical assets and paper silver (e.g. futures contracts).