Silver surged to its highest price in years on Monday as it became the latest target for a brigade of day-traders on Reddit.
The precious metal was recently trading up about 9 percent at about $29.40 an ounce after rising above $30 for the first time since 2013. The spike came amid increased interest in silver on Reddit’s WallStreetBets forum, which has pumped up the stock prices of companies such as GameStop and AMC Entertainment.
The message board has waged war on hedge funds betting against those beaten-down businesses — and now some rookie traders want to execute a similar “short squeeze” in silver to pressure banks that have bet on its price dropping.
“Silver Bullion Market is one of the most manipulated on earth,” Reddit user RocketBoomGo wrote in a popular post outlining the thesis. “Any short squeeze in silver paper shorts would be EPIC.”
“If you don’t care about the gains, think about the banks like JP MORGAN you’d be destroying along the way,” the poster added.
The “#SilverSqueeze” movement won support from Tyler and Cameron Winklevoss, the twin-brother venture capitalists who famously sued Facebook founder Mark Zuckerberg and currently run a cryptocurrency exchange.
“The #silversqueeze is a rage against the machine,” Tyler Winklevoss said on Twitter Sunday.
But the squeeze play was not universally accepted on the 7.8 million-member WallStreetBets board. Several posts on Monday urged members to avoid betting on silver, with some claiming hedge funds and the media were pushing the price jump.
“[S]top trying to make silver happen, it’s not going to happen,” a user named snacksandmetal wrote.
The skeptics didn’t stop interest in silver from exploding, however. Precious metals broker APMEX said demand was 12 times higher than normal over the weekend and that it added as many new customers on Saturday as it usually adds in a week.
“We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place,” CEO Ken Lewis said in a statement posted on APMEX’s website. “We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal.”
With Post wires