There were more than 4 million shares of the ETFMG Prime Junior Silver Miners ETF traded on Thursday and Friday, compared with a three-month average volume of 1.56 million, according to Stephen Gardner, the firm's director of sales. Melvin Capital, one of the hedge funds that originally had short positions in GameStop, lost 53% in January. The dramatic spikes in GameStop and other heavily shorted stocks were due in part to a short squeeze, which is a phenomenon where investors who have bet against a stock are forced to buy shares to cover their positions as the name moves higher. If it's exposed that there are more paper claims on silver than actual silver, not only would payoff be enormous, but gold would be next. The move in silver was touted by investors who are bullish on cryptocurrencies like Bitcoin, which see the new digital assets in part as replacements for traditional metals.Ĭameron Winklevoss, co-founder of cryptocurrency firm Gemini, said on twitter that, "The ramifications of a #silversqueeze cannot be underestimated. "It's a very different target, but the fact that you can move silver, such a large market, is an indication to everybody that they have to take these new technicals seriously," said Allianz chief economic advisor Mohamed El-Erian on " Squawk Box." The forum had multiple active threads dedicated to silver on Sunday night, and the phrase "#silversqueeze" was also trending on Twitter. The spike in demand for silver appears to be related to retail traders in the Reddit forum WallStreetBets, which has helped drive trading activity in heavily shorted stocks like GameStop and AMC Entertainment in recent weeks. The two rose 16.9% and 14.7%, respectively, on Thursday and Friday.
Silver mining stocks Coeur Mining and Pan American Silver surged 23.1% and 12.1% respectively on Monday.
The iShares Silver Trust, an ETF that retail investors can easily buy that seeks to track the price of silver, rose 8.1% on Monday after popping 6% last week. The move higher extended gains for silver and silver-related equities late last week.
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