GameStop investor battle moves on to silver as prices surge

Silver prices reached an eight-year high after calls for the purchase of metal on social media sparked a commercial frenzy.

Silver bullion
GETTY IMAGES

This comes a week after amateur investors accumulated in GameStop game retailer stocks, causing them a 700% jump.

On Monday, silver rose 11% to $ 30 an ounce, while shares of some mining companies rose as much as 60%.

It is believed that short-term traders who exchange tips on Reddit are behind the trend as they seek to raise prices.

However, some users of the site dispute this, claiming that the “Silver Print” is secretly coordinated by large Wall Street companies.

Silver has reached its highest price since 2013
What’s going on?
This is the latest example for seemingly short-term traders who use large Wall Street hedge funds and hope to profit if the price of an asset or stock falls, but can lose heavily if it rises.

Tips posted on social media sites like Reddit say these so-called “short sellers” are manipulating markets.

Thus, amateurs buy stocks or tools, raising the price and causing losses to big players.

The IG UK trading platform will stop new GameStop trades
GameStop: Who will win the market battle?
Global guards are on standby as the GameStop craze grows
It began in January, when amateurs moved into a loss-making retailer at GameStop and other companies such as AMC and Blackberry.

GameStop shares, which traded at less than $ 20 (£ 14.61) in early January, rose to nearly $ 350 last week. They fell 30% to $ 225 on Monday.

The battle seems to have entered silver, a much larger market.

What do they say to flood the speculation?
The price of silver slipped from its early peak on Monday. But the metal has risen nearly 20% since Wednesday, when messages began to spread on Reddit forums encouraging users to buy the metal.

Coin-selling sites say they are experiencing unprecedented demand and delays in silver shipments.

Looking at the exchange of many tips on the site, a user named RocketBoomGo urged his merchant associates in a widespread post to “think about Gainz.”

“If you’re not interested in making a profit, think of banks like JP Morgan that you’re ruining along the way,” they added.

A person passes a GameStop in the Manhattan district of New York City, New York, USA, on January 29, 2021.
PICTURE COPYRIGHT
Shares of GameStop rose more than 700% last week due to amateur investors
Some on the Reddit side expressed skepticism, one said they analyzed the comments and posts on the Wall Street Silver thread and found that 80% “mostly come from accounts created in the last 2 days. Pretty suspects .. who really work because?

GameStop – a political fair
Hussein Sayed, chief market strategist at FXTM, says amateur investors have a much harder time influencing the price of silver than with GameStop.

On the one hand, the total value of silver sold was $ 1.4 to $ 1.6 trillion, he said, which is 1,000 times the total value of GameStop’s share capital before it became the target of speculation.

Much of the silver market also exists “over-the-counter”, meaning it is not so easy to buy and sell online.

2px presentation gray line
Field of analysis: Simon Jack, business editor
An army of small investors are marching in for a variety of reasons.

Some hope to profit from getting in early and starting another wave that does the same, riding on it a bit before getting off the wave and letting it crash after making their profit.

Others will see that something is going up and think the limit is heaven – there’s still plenty of time for me to profit.

And others think – I don’t really care if I lose a few bucks, clinging to a man is the name of the game.

The first group will make money and are likely to be penetrated by the professionals they hoped for.

The second group will eventually become poorer and happier because of this.

The third may be poorer, but they don’t care – they made a telling political point.

You can read more here.

2px presentation gray line

media caption WATCH: What’s going on at GameStop?
“Retailers who just follow the stock and join the party late can accumulate huge losses and need more rational decisions,” Mr Sayed added.

‘Once in a lifetime’
GameStop investors have already been given a taste of these risks.

The company’s stock has been down since last week when the craze has sparked regulatory attention and trading platforms have imposed restrictions on shares of GameStop and a few other companies.

This decision har

If you see the online hype that has convinced you, the price will go up. Now he persists, in part, to send a message to the hedge fund giants.

“At first, I was in it like people are probably lately, just to try to make some money on it,” he said. “But now … I’m out of stock in principle.

“I think it’s wrong what they’re doing, and the fact that they’ve changed the rules of the game now when the little man takes advantage.”

Mr Grainger said he was prepared to risk a stake in a small part of his portfolio and hoped that if many acted similarly, bettors against the company would suffer losses.

But he said he doesn’t expect there to be too many similar opportunities in the future – in silver or elsewhere.

“Now that we’ve taken advantage, I don’t think the market would repeat that,” he said.

“I think it’s a one-time occasion in life, and I hope it makes these big companies change the way they work, so this kind of thing can’t happen again.”

Are the Wall Street giants on a rope?
Despite some hopes, one of the biggest gains from last week’s market action was claimed by Wall Street giants such as BlackRock Trust and Silver Lake Private Equity.

However, other large investors were flooded with the trading frenzy.

The Melvin Capital hedge fund, which has strongly welcomed the decline in GameStop shares, lost 53% of its value towards the end of January, according to press reports.

The firm has since received new cash commitments from investors, leaving about $ 8 billion (£ 5.8 billion) in assets, but this continues to decline from $ 12.5 billion in early 2021, according to Reuters.