Silver, the slightly lesser-known precious metal has dominated headlines recently following an unprecedented event. While from a broader perspective, this helps people remember its importance as a precious metal, it still faces harder competition against Gold, one of the most demanded assets and a haven for investors and even societies.
Silver generally moves in tandem with Gold and has long been an alternative for those already holding the yellow metal. Others may approach it as a hedge to their current Gold holdings when demand for safety-linked assets drop.
Social media pushes Silver into the spotlight
A Reddit-fueled mass buying episode gave way to one of the largest percentage gains in history, pushing Silver to a near eight-year high. This happened across the board with high activity on futures, the spot market, and even Silver ETFs.
Similar to the squeeze that took place on Gamestop, retail investors are once again attempting to challenge the superpowers of the financial world. In this case, they played a part in pushing an asset much higher in a matter of hours.
Headlines are not always the reality of the situation
Psychology tends to dominate how markets move beyond the idea of supply and demand. What this means is that such squeezes and unusual moves are not 100% transparent on who fueled them. Retail traders who had similar reasons to get in may not be the only ones who managed to move the markets higher. Instead, this could have been a tactical opportunity that larger investors and hedge funds took advantage of to make profits. Furthermore, Silver is a much bigger market and may take more than the typical masses to move in such a manner.
The power of social media is indeed becoming more prominent as traders get together and agree on a specific direction to bet on. Also, the presence of trading apps and the ease of accessing the markets, whether through CFI or other companies around the world are playing an increasingly important role.
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The content present in this article reflects the opinions and views of the author and does not necessarily reflect the position of CFI. The material published on this blog is provided for informational purposes only and should not be considered as investment advice. The Company is not responsible for the decisions and choices of the investor who has full and free will to make decisions that they see appropriate upon the investor’s sole discretion.