We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. The weekends are unique as we are not able to real-time hedge our position. We do this because it is our goal not to take a speculative position on metal. On Saturday alone, we added as many new customers as we usually add in a week.Īny Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. Combined with the extremely high demand levels, we are also seeing a surge in new customers. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. In the last week, we have seen a dramatic shift in Silver demand from our customers. Ken Lewis, CEO of Apmex (which sells silver coins and bars) says a “dramatic shift in silver demand” forced the company to stop sales over the weekend. bullion broker Apmex has warned that it expects a 1-3 delay in processing silver transactions, due to a surge of orders in recent days. 08.34 GMT Apmex reports 'dramatic shift in Silver demand' By contrast, the value of silver sitting in vaults in London is alone worth about $48 billion. The bricks-and-mortar video game retailer had a market capitalization of about $1.4 billion in mid-January, before the Reddit frenzy sent the company’s value soaring more than 16-fold. The market for silver is also by some measures much deeper than those for smaller stocks like GameStop. For one, the scope for a short squeeze in silver is far less obvious: money managers have had a net-long position on the metal since mid-2019, futures and options data from the Commodity Futures Trading Commission show. Yet silver differs in important ways from stocks like GameStop. Spot silver rises 10%, hitting $30 per ounce for the first time since Feb 2013 | #WSB #silversqueeze- Javier Blas February 1, 2021īut as I flagged up earlier, some WallStreetBets posters are urging against piling into silver, saying it’s a diversion to help the hedge funds.īy buying silver/going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME □ □ □ □ □ The hedge funds are LONG silver NOT short silver.Īnd as Bloomberg explains, silver is hardly being shorted in the same way as GameStop: “There is a misnomer here that banks are constantly running short positions, but from a price perspective they are neutral, they have a long and a short that cancels each other out,” he said. Mr Norman said the Reddit forum’s targeting of large banks was misplaced, since the lenders used futures contracts to hedge their physical holdings of silver, meaning they were not speculating on the price falling. London’s vaults hold around 33,475 tonnes of silver, valued at $23.8bn, they said in January. Not only is silver a substantial market, the major banks won’t feel the same pressure as from the GameStop squeeze, Norman explained.Īround $6bn worth of silver traded hands in the silver market in November, according to the latest statistics from the London Bullion Market Association. “It’s a fools’ errand, it’s financial anarchy somebody is going to get hurt,” said Ross Norman, a veteran precious metals trader. Please review our Terms & Conditions for accessing Gold News.The Financial Times flags up that those hoping to hurt Wall Street banks by piling into silver could get stung. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Please Note: All articles published here are to inform your thinking, not lead it. See the full archive of Adrian Ash articles on GoldNews. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online.
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