schema:articleBody
| - Silver prices hit eight-year highs Monday with support from investors carrying out action similar to that which sent shares in video game retailer GameStop surging. The metal jumped to $30.10 an ounce before falling back slightly to $29.29, still a gain of 8.6 percent. Since Thursday, silver has gained around 16 percent in value. "Retail traders are herding into silver in the same way they have driven the likes of GameStop over the last week," said Neil Wilson, chief market Analyst at Markets.com. Amateur investors, organising over Reddit and other online forums, are targeting shares of companies including GameStop that have been "short-sold" by hedge funds in a bet that the prices would fall. Shares in GameStop, a company that has been financially ailing, soared during the Reddit group's massive buying initiative -- mounted in protest against hedge fund bets on GameStop's demise. To cover their losses, the hedge funds have to buy back, at higher prices, shares they had sold. Silver soared after investors reacted to messages appearing on the Reddit forum WallStreetBets talking about an opportunity to push up the price. In this case it is banks that are being hurt rather than hedge funds. Hussein Sayed, chief market strategist at FXTM, said "influencing the price of silver will not be as easy" as it was with GameStop owing to the metal's total market value of around $1.5 trillion. At its high last week, GameStop was worth $22.8 billion. But the tactic of pushing up silver prices could work should investors succeed in tightening the physical market for the metal, according to analysts. "In the medium term, any excessive price rise is harmful for silver because it irrevocably destroys part of the physical demand," said Commerzbank analyst Eugen Weinberg. Swissquote Bank analyst Ipek Ozkardeskaya cautioned meanwhile that "in this game... if you lose full support, and momentum, it's over. "This is why, the speculative rush is a prosperous, but a dangerous game." burs-js-bcp/wai
|