Spot Silver Prices jumped 6% on February 1st 2021, is this the beginning of a Short Squeeze?
Spot Silver Prices opened with a massive 6.32% Gap Up to $28.8 on Monday morning, just the day after #SilverSqueeze was trending on twitter. Silver is considered to be one of the most “shorted commodity” and the price was just shy of $27 during Friday close on 29th January 2021 and now it’s hovering above $28.5 range.
While Gold also managed to open up +0.6% higher, but still many consider the rally for Silver to outpace Gold this year. This started after last weeks major price fluctuations in Gamestop : GME and AMC Entertainment share prices by the famous reddit community r/wallstreetbets. After pushing up the share prices of Gamestop : GME by almost 1500% and AMC Entertainment over 500%, the traders turned their focus on Silver with #SilverSqueeze trending all day on 31st January 2021.
With #SilverSqueeze still trending as hot topic on twitter at the time of writing this article, it is still uncertain to say if there will be a real rally for Silver starting here or will the attempts by big banks and financial institutions to control this lead to putting a control on this. According to the latest article by bloomberg.com, retail sites were overwhelmed by the demand for silver bars and coins on the end of weekend, giving hints that reddit based hysteria and twitter trend might actually be turning this into something against physical based asset, Silver. A massive 50 million ounces have been said to be exchanged hands within the first 15 minutes if futures trading and there were reports that precious metals webshops were closing in Holland.
And now looks like there is no stopping this metal today, which has soared up even more breaching the $29 mark and up 8.3% in total in just 1 day so far. Once the U.S. market is open more volatility is expected and markets will experience more volume and trades. So far, the Silver Futures have been moving towards upward direction and given the momentum and trends looks like this is start of the first leg. More information is yet to surface to give a clear direction about it, so investing or trading in current market conditions should be done very carefully and at your own risk.