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. Since mid-December, COMEX silver stocks have increased by more than 22 million ounces as London stocks have reached critically low levels. Adding to the problem, tepid mine output over the last four years has pressured above-ground silver stocks. But last week, lease rates suddenly surged to over 3.5 percent on an https://www.forex-reviews.org/ annualized basis. Speaking from a technical perspective, silver prices are extremely overbought. The Relative Strength Index on the daily time frame has reached near $70, which means a pullback is likely.
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Investor behavior and market perception were notably altered, with the Silversqueeze highlighting the growing influence of retail investors and the power of social media in shaping market dynamics. The movement challenged traditional notions of market control and brought attention to the practices of large financial institutions, particularly in relation to short-selling. I encouraged investors to remain confident, as I believed silver was on the brink of a historic bull market. Keep in mind that silver stocks in London are also tied to ETFs and over-the-counter trading.
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- Usually, investors short stocks they believe to be overvalued due to a variety of possible reasons.
- On this page, we’re taking a closer look at the concept of a silver short squeeze and answering some of your questions about how it may (or may not) apply to the current silver market.
- Contact us now at email protected to find out more about buying and storing silver bars and coins in a secure and private manner.
- Buying during the pandemic certainly played a big role, but it wasn’t until Reddit investors jumped in that the sale of bullion jumped over 250 percent.
- Allegedly, this can create the false impression that there is an abundance of silver, while in fact, it is in short supply.
- Nonetheless, it would be unwise to underestimate the purchasing power of retail investors, and the idea of this was clearly demonstrated last week.
When the market finally breaks, we’ll likely see exchanges failing to deliver physical silver, forcing cash settlements. This will drive people to seek physical metal, creating a self-reinforcing cycle. When I demanded bar numbers for our inventory purposes, we were met with weeks of silence and more excuses. Our legal position was frustrating – our lawyers advised that we couldn’t effectively sue because what damages could we claim? Missing out on “the enjoyment of looking at our silver bars” wasn’t exactly a compelling legal argument.
Attempted Silver Short Squeeze (
Buying physical silver or shares of silver stocks is a way to be involved in the so-called “Silver Squeeze 2.0.” When more investors buy a stock or commodity, short-sellers usually need to sell shares to cover their losses. SLV is one way to get involved, although you should always be aware of the risks in any kind of short squeeze. To understand the silver squeeze, you first need to know the meaning of a short squeeze. J.P. Morgan Chase is one of the largest traders of precious metals, so the Reddit user mentioned taking on the banking giant. The person also noted silver stocks available to retail investors—First Majestic Silver Corp and the iShares Silver Trust ETF.
What Is Basel III & Silver Squeeze in Simple Terms? Defining the Catalysts to Real Gold & Silver Prices
The French learned this lesson the hard way when silver left their country and their currency was no longer backed – leading to economic chaos. The inflation-adjusted highs from the 1970s would equate to over $200/oz today, and I believe we’ll not only test but exceed those levels. Here, I will break down the details of silver’s Friday breakout and explain why a powerful silver squeeze has now officially begun. When a trader is “long,” that means they actually own and possess a stock that they hope will go up in value, at which point they will sell. Traders can also “short” Kraken Review stocks, meaning that they are betting that these assets will go down in value over time.
- For the past several weeks, I’ve been writing articles and creating video presentations about an imminent silver breakout that could quickly push prices to $50.
- Adding to the problem, tepid mine output over the last four years has pressured above-ground silver stocks.
- Earlier in this article, I mentioned that a significant portion of Friday’s silver buying volume was likely driven by short-covering.
- This could mark the end of the banking cartel’s long-running scheme to suppress silver prices.
- Finally, after they’ve positioned themselves net long via the futures market they let the price rip.
- 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.
- Scrolling through the many threads in the Reddit group reveals what one might expect from any online community.
The Banking Cartel’s Silver Scheme: Decades of Price Suppression
For the past several weeks, I’ve been writing about an imminent silver breakout that could quickly push prices to $50. The long-term gold-to-silver ratio chart reveals that silver is currently significantly undervalued compared to gold, indicating that silver has much more room to rise in order to catch up. 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. In January 2021, GameStop and AMC weren’t the only stocks experiencing major swings fueled by certain Reddit communities.
Final Thoughts: Understanding the Silver Short Squeeze
However, even a quick 11% increase in the price of silver during WallStreetBets’ 2021 short squeeze attempt was insufficient to trigger a Best monthly dividends genuine short squeeze. At least for now, silver price action is far too muted for anyone to convincingly call it a short squeeze. At Silver Gold Bull, our content is researched, written, edited and reviewed by a team of financial experts with decades of experience in the precious metals industry. With each piece we write, we bring our own personal experience and expertise, while combining that with today’s leading research and data.