The “Occupy Wall Street 2.0” wave triggered by the short position of video game retailer GameStop (GME) continues to ferment, with speculation spreading from the stock market to other assets! Retailers in the online discussion forum to push the wave, the international silver price on Monday for the first Time since 2013 rose through the $ 30 per ounce mark, silver-related shares across the line burst, from Australia to the United States around the “silver rush” investment phenomenon. Singapore has a trading platform through, customers are selling Gold to buy silver; market estimates that silver prices in the short term seizure of $ 40 to 50 per ounce is not impossible. However, some retail investors questioned the hedge fund “mole” as.
Silver is known as the “poor man’s gold”, the price last August followed the price of gold to multi-year highs after repeated consolidation, only last week to break the dull pattern, started in the online discussion forum Reddit’s investment group “Bet on Wall Street” ( WallStreetBets, WSB) posting, encouraged to carry out “hold short position” action, the goal is to hold the explosion of Wall Street big banks.
By the speculative wind, silver mining stocks are highly sought after, Australia’s large mining company South32 Monday (1) shares rose 5.1%; Silver Mines Ltd. soared 49%. Listed in Hong Kong, China Silver Group (00815) and Gold Cat Silver Cat (01815) closed the market rose 62.6% and 80% respectively. Continental Construction Bank (00939) reminded investors that the recent increase in price volatility of precious metals, to carefully control positions, rational investment.
In fact, in the funds sought after, BlackRock’s world’s largest silver exchange-traded funds – iShares Silver Trust (SLV) on Friday (January 29) to break the record absorption of $ 944 million. According to the U.S. Commodity Futures Trading Commission (CFTC) figures, the week ended January 26, the number of silver long contracts rose to a 3-week high.
Retailers also targeted the real silver market over the past weekend, so that the demand for silver coins and silver bullion suddenly surged, the premium for the American Eagle silver coin from the normal $2, the past three days popped up to nearly $5. A number of U.S. silver coin dealers have said that the site in Asia before the market opens on Monday can not handle orders. Apmex, known as the “precious metals Wal-Mart” in North America, revealed that the number of new customers on Saturday was equivalent to the level of the past week. Its chief executive Ken Lewis described the suspension of silver sales as unprecedented in the company’s history, and is assessing market conditions, believing that the price and demand for silver in the coming day or even weeks is difficult to estimate, and will lock in any silver supply in the market.
Another silver coin dealer SD Bullion CEO Tyler Wall said almost all silver inventory has been emptied; Zaner Group senior vice president Peter Thomas pointed out that retail investors continue to hold silver bullion, did not take advantage of the high profit, the situation is “terrible”. As for the Sydney vault Guardian Vaults business development manager John Feeney described the silver rush situation as “crazy”.
International gold prices also benefited from the climb in silver prices on Monday, not dragged by the news that the China Gold Association announced that the actual consumption of gold on the mainland last year fell by 18.13% to 820.98 tons. New York gold futures rose 0.82% to $1,865.4 in the early part of the United States; spot gold prices also rose 0.79% to $1,862.26.
In fact, the silver price rose 50% in the past year, mainly benefited from the weak dollar and look forward to the end of the Epidemic, driving the industrial demand for silver. Silver has also recently been praised by Wall Street banks, Goldman Sachs in last week’s report described silver as “the first choice of precious metals”, the target price of $30. The price was not expected to arrive within a week.
However, some analysts believe that the silver market is quite different from the GME in nature, questioning the space for silver to be held light, according to CFTC information, fund managers have been holding a net good position in silver since mid-2019, essentially different from the GME. In addition, the size of the silver market is far larger than the GME, GME shares in mid-January before the explosion, the market value of only about 1.4 billion U.S. dollars, only after a surge of 16 times; in contrast, the inventory in London alone has been worth about 48 billion U.S. dollars of silver. Moreover, some WSB netizens have questioned the high silver price and mentioned Citadel, led by famous hedge fund manager Geffen, as the largest holder of SLV.
Howie Lee, an economist at OCBC Bank, pointed out that last week’s events showed that it was unwise to question the purchasing power of retail investors, and their power has been reflected in silver, but it is more difficult to hold a short position in this market than in the GME because the size and liquidity of silver are far greater. The company’s main focus is on the silver market, but once there is a larger deleveraging action in other markets, gold and silver may both fall into the same predicament as in March last year.
The Hunt Brothers’ silver speculation in the 1970s and 1980s soared 8 times in 12 months]
Retailers speculate on silver prices, reminiscent of the past speculative phenomenon in the silver market. In the 1970s and 1980s, the Hunt Brothers (Hunt Brothers) speculation in the history of commodity futures and spot silver can be said to be famous, with their strong financial strength and relations, nearly monopolized the silver market, prompting the price of silver soared, and eventually triggered the intervention of regulatory agencies, a disastrous end.
By December 1973, the Hunt brothers had purchased $20 million worth of silver spot and 35 million ounces of silver futures at a cost of $2.90 per ounce, making them one of the world’s largest silver market player in the world.
Unexpectedly, the Mexican government also hoarded 50 million ounces of silver at a cost of less than $2, and thought that the profit at the then $6.70 price was considerable, so they sold the goods for profit, causing the silver price to fall back to about $4. Although the Hunt Family did not lose money, their books were greatly reduced and they realized that they needed the help of outside strategic investors and lobbied the Saudi Arabian government and royal family for support.
The Hunt brothers continued to take in large amounts of silver spot and futures, and by the late 1970s, direct control of silver spot could reach several hundred million ounces. Meanwhile, global Inflation and political instability had been going on for several years, and the price of gold rose to $500 per ounce, while the price of silver rose to a lesser extent, only to about $11.
In the summer of 1979, the Hunt brothers went on the offensive, placing cumulative buying orders of over 40 million ounces on the futures exchanges in New York and Chicago. Huge buying was observed in the market, and the price of silver quickly rose from $6 to $11. Interestingly, when word spread that the Hunt brothers were manipulating silver, the price continued to rise, and many small speculators poured into the market, and the price of silver became increasingly wild, topping $40 by the end of 1979.
In January 1980, silver rose to an all-time intraday high of $50.35. In just 12 months, the price of silver rose 8 times; from the previous 10 years ago, the price of silver rose even more 25 times.
In the face of the sharp rise in silver prices, the Federal Reserve, the New York Commodity Futures Exchange (COMEX) and the Commodity Futures Trading Commission (CFTC) finally moved to force the Hunt brothers to close their positions, silver prices also fell sharply from the peak in a short period of time. The silver market collapsed, and the Hunt brothers eventually declared bankruptcy in September 1988. They were subsequently charged with manipulating the silver market and were fined and banned from trading in the commodities market again.
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