News The next GameStop? Silver price jumps to eight-year high thanks to retail traders on Reddit
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The next GameStop? Silver price jumps to eight-year high thanks to retail traders on Reddit

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The price of silver has surged to an eight-year high after an online army of Reddit traders shifted their focus from heavily shorted stocks like GameStop to the precious metal.

Silver prices jumped as high as 13 per cent to $30.35 ($A39) while shares of GameStop, a video game retailer, fell about 20 percent.

It comes after as many as six million members of a Reddit forum called WallStreetBets started posting about GameStop, causing the company’s share price to soar from $US21 ($A27.50) to $US325 on Friday.

The retail traders on the social media platform defeated hedge funds that had bet the shares would fall by selling them short, in a stunning reversal of financial power on Wall Street.

Could silver be their next target? The hashtag #silversqueeze is the latest market strategy to emerge from the “WallStreetBets” forum on Reddit.

It’s been a wild ride for GameStop. Photo: AP

Silver futures jumped to their highest since February 2013 after the hashtag started trending on Twitter.

It is the latest example of the influence wielded by followers of the Reddit group targeting inequality in the global financial system.

Demand overflowed into Australian mining stocks shares, even those that have yet to start producing any of the metal.

Silver Mines Ltd, which is working on an undeveloped deposit, jumped 50 per cent on Monday, while other mining shares on the Australian Stock Exchange saw double-digit gains.

Michael Every, global strategist at Rabobank, said that the claims online are that gold and silver prices are being repressed by financial bets against them.

If the price goes up enough for an extended period of time, the thinking goes, the big investors who bet against gold and silver would eventually have to reverse those trades, buying back in – and pushing the price even higher.

That is partly what helped fuel a massive surge in GameStop last week.

The silver market frenzy also extended to physical demand for the metal, with coin dealers reporting delays in deliveries as they were overwhelmed by demand.

The Silver Mountain, a Netherlands-based bullion dealer, said it temporarily could not accept any new orders “due to extreme market volatility”.

-with AAP