“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. Watch his full analysis of the forces about to set off a physical silver rally on AZTV’s Mike Broomhead show. In the long term, the Silversqueeze may lead to lasting changes in how investors approach commodity trading and perceive market dynamics.
Trade Wars Move Markets
Under normal market conditions, big banks that deal in bullion such as JPMorgan and HSBC, along with hedge funds and high-frequency trading firms, serve to balance prices between New York and London. For instance, when prices rise on the New York COMEX, traders sell those futures contracts and buy lower-priced London futures, earning a small profit. These “arbitrage trades” tend to hold the two trading centers roughly in balance. Last week, Money Metals reported uncertainty in the gold and silver markets due to worries about tariffs on precious metals entering the United States. We’re seeing signs that concern is growing, creating an interesting dynamic in the London precious metals market. Given that silver prices took out the $30 price level earlier today, the next major psychological resistance is $35 and $40.
What’s next for gold price’s record-breaking run? The charts say this – Gary Wagner
The market experienced wild swings as the influx of new buyers clashed with institutional strategies. Trading volumes in silver futures soared as both speculative traders and hedgers adjusted their positions in response to the changing market dynamics. This heightened volatility not only affected silver prices but also had ripple effects across related markets, such as mining stocks and other precious metals. The dramatic price movements underscored the sensitivity of commodity markets to sudden changes in demand and the potential for retail investors to exert substantial influence under certain itrader review conditions. Silver’s breakout on Friday marks a pivotal moment in its ongoing bull market, confirming many of the key conditions I’ve been highlighting for weeks.
- Based on number-crunching by Bloomberg, only 50 million ounces of silver remained as of the end of December before withdrawals of readily available silver dip below the average trading volume.
- Their actions caused the price of silver to rise from $6.08 per troy ounce at the beginning of 1979 to $49.45 just one year later.
- The movement challenged traditional notions of market control and brought attention to the practices of large financial institutions, particularly in relation to short-selling.
- The person also noted silver stocks available to retail investors—First Majestic Silver Corp and the iShares Silver Trust ETF.
- Just like a trader who is long on a stock loses money in proportion to how much that stock loses value, short traders lose money when a stock appreciates, or becomes more valuable.
- If the ratio were to revert to its historical average of 52.8 since 1915, even without any increase in gold’s price, silver would be valued at a respectable $51.55 per ounce.
- The incident served as a catalyst for discussions about market transparency, the role of social media in trading behavior, and the need for balanced regulatory frameworks to ensure market integrity.
If you don’t want to worry about market volatility, however, you’ll want to make sure you’re buying the right silver products. While gold reaching $3,000 might be a bit far-fetched, it’s actually quite realistic, as it’s just over a 10% increase from today’s price. Here I will break down the details of silver’s Friday breakout and explain why a powerful silver squeeze has now officially begun. In this presentation, Jeffrey Christian of CPM Group explains what’s really behind the latest surge in silver prices, why silver jumped to over $34, and what is likely to happen next.
- When this happens, prices for the asset climb even higher, creating a pattern known as a short squeeze.
- The Silversqueeze led to notable disruptions in the supply chain for physical silver.
- People can argue over whether the price of silver will skyrocket, but it’s hard to deny that market manipulation exists.
- As this happens, it’s easy to foresee a significant increase in the price of silver.
- If you haven’t heard of these issues and events, the following guide will help you understand what’s going on and what it could mean for you.
- ” emojis are certainly exciting, they’re not really the crux of what’s going on in the movement.
Why This Time Is Different
When squeezes start due to actual physical demand they engage in unethical conduct delaying their deliveries to buy themselves time. They likely get aggressive in outer month futures contracts to cover their asses and probably even ultimately profit from the rise they expect they will be causing as they slow walk their promised deliveries of material. Along the way they rely on margin requirements to be increased and profit taking to occur by speculators that don’t have the market insights the banks do.
Supply Chain Disruptions
Basel III could accelerate the efforts of Wall Street Silver, the Reddit group behind the Silver Squeeze. 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. The Silversqueeze phenomenon had a profound and multifaceted impact on the silver market, demonstrating the power of coordinated retail investor actions in a traditionally institutionally dominated space. The immediate effects included a significant spike in silver prices and increased market volatility, highlighting the potential for sudden shifts in demand to disrupt market stability. The movement also exposed vulnerabilities in the physical silver supply chain, leading to shortages and delays as mints and dealers struggled to meet the surge in demand.
In the end, this isn’t just about profit potential – though that certainly exists. It’s about the resolution of decades of market distortion and the reimagining of how we price and trade one of humanity’s most crucial metals. When the silver short squeeze finally arrives, it won’t just be a market event; it will be a historic reset that reshapes the precious metals landscape for generations to come. Since 2003, SilverSeek.com has served millions of readers with the latest silver news and information. Even more exciting is the fact that silver’s logarithmic chart, dating back to the 1960s, reveals a cup-and-handle pattern, indicating the potential for silver to reach several hundred dollars per ounce during this bull market. In order to confirm this particular scenario, silver needs to close decisively above the $50 resistance level.
Missing Metals: The Big Gold Squeeze
The term “Silversqueeze” emerged in early 2021, describing the phenomenon where a large group of retail investors, largely coordinated through social media platforms like Reddit, sought to drive up the price of silver. This collective effort was inspired by the success of a similar movement that targeted GameStop’s stock, and it aimed to challenge the dominance of institutional investors who held significant short positions in silver. The resulting surge in demand for silver had profound impacts on the market, influencing prices, supply chains, investor behavior, and regulatory responses. This article Best investment opportunities delves deeper into each of these areas to explore the multifaceted consequences of the Silversqueeze.
During a short squeeze, investors who were betting that the investment would become less valuable lose money, effectively “squeezing” them out of the position. When these traders limit their losses by buying more of the stock they were previously shorting, the price of the asset increases even more, creating a cyclical pattern that accelerates a stock’s rise in value. For many retail investors, the Silversqueeze was about more than just financial gain; it was a form of protest against perceived market manipulation and the influence of large financial institutions. The narrative of “David vs. Goliath” resonated with many participants, fueling their determination to drive up silver prices and expose vulnerabilities in the market. This sentiment was evident in the rhetoric used on social media, where posts often framed the movement as a fight for market fairness and transparency.
Keep in mind that Ghali’s projection of “slowing demand growth” is coming off record industrial demand, and we’ve already seen market deficits for four straight years. TD Securities senior strategist Daniel Ghali told Bloomberg that the threat of tariffs is already “accelerating https://www.forex-reviews.org/ the timeline to depletion” of the free-floating silver stock in London. He projects a significant supply crunch this year despite a slowdown in demand growth.
The London Metal Exchange’s recent nickel crisis showed how quickly commodity exchanges can break under pressure. The lesson from my Sprott days remains crystal clear – when you really need delivery, paper promises can prove worthless. In a market this tight, physical possession isn’t just nine-tenths of the law – it’s everything. The coming silver squeeze will likely make our previous delivery issues look minor in comparison. Silver has always been considered “poor man’s gold,” but history shows its potential for explosive moves.
