Posted on 02/01/2021 7:40:09 AM PST by SeekAndFind
It's been a long time coming, but for precious metal fans the day of joy has finally arrived: following a coordinated campaign to buy both silver ETFs in the paper realm and precious metals in the physical, which over the weekend which left virtually US precious metals retailer with little to no physical inventory, silver has finally exploded higher following in the footsteps of other "most-shorted" names, and it was last trading just around $30/ounce, soaring by 11.5% - its biggest one-day jump since Sept 16, 2008 - the day Lehman filed for bankruptcy. And, if silver closes here, it would be the highest price since early 2013.
The euphoria in the metal spilled over to various silver minter, with U.S.-listed peers soaring in the pre-market trading:
European silver miners also soared on Monday led by Fresnillo, which rose as much as 17%, most since March; other exposed miners rise: Polymetal +6%, Hochschild Mining +17%. Elsewhere, China Silver Group Ltd. rose as much as 63% in Hong Kong, while Australia’s Silver Mines Ltd. gained as much as 49%.
Trying to pour cold water on the second biggest one-day move in silver this century - because let's face it, getting silver to move up by 10% is far more difficult than getting a low float, super squeezed stock like GME to soar by 1600% - Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank said that "so far, it is not exactly the GameStop anomaly, but it is a hint that the retail traders who just discovered the strength of their unity are out there, looking for new targets – and apparently bigger ones."
As we reported extensively over the weekend, silver’s advance can be traced to r/WallStreetBets forum, where one post last week declared the metal “THE BIGGEST SHORT IN THE WORLD” and encouraged traders to pile into the iShares trust as a way to stick it to big banks.
The calls to buy silver began appearing on WallStreetBets as early as Wednesday, when the mania surrounding GameStop reached a fever pitch. Some of the posts touched on a similar David-vs-Goliath theme that has inspired individual investors to take on short-selling hedge funds: “Any short squeeze in silver paper shorts would be EPIC. We know billion (sic) banks are manipulating gold and silver to cover real inflation.”
“Last week’s events have shown it to be unwise to doubt the purchasing power of retail investors, and this has been sufficiently demonstrated again on the silver market," said Howie Lee, an economist at Oversea-Chinese Banking Corp.
Yet as Bloomberg correctly notes, silver differs in important ways from 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. More importantly, the market for silver is also by some measures much deeper than those for smaller stocks like GameStop. 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. By contrast, London vaults held 1.08 billion ounces of silver at the end of November, according to LBMA data. That’s worth almost $32 billion at current prices.
"They may find it a bit harder to squeeze the silver market than they did with GameStop -- the former is much bigger and more liquid -- but the momentum looks like it rests with them at the moment" said Lee. Which is why the fact that a bunch of rag-tag forum participants managed to spark the momentum to send silver higher by a near record, is in many ways far more remarkable than their achievements in GME and other most-shorted stocks.
What happens next? Don't expect a reversal of the surge any time soon: short-term forward rates on the London silver market flattened on Monday, indicating strong demand for the metal in coming weeks.
“I can envisage a scenario where maybe a hedge fund has purchased maybe a short-term tactical long position, so the upside could be a combination of several factors now,” said Philip Newman, managing director at consultancy Metals Focus.
* * *
Finally, there is the physical aspect: As we first reported, amid expectations for a surge in silver prices, sellers of physical silver including Apmex - called the Walmart of precious metals products in North America - said they were unable to process orders until Asian markets opened because of record demand.
Ken Lewis, Apmex’s chief executive officer, said the decision to temporarily suspend silver sales was unprecedented in the company’s history and that it may take longer then usual to fill orders going forward.
“As we evaluate the markets, it is difficult to know where silver’s price and demand will go in the coming day and weeks,” Lewis said, adding that his firm is “locking up any metal we can find in the marketplace.”
"It’s been nuts,” said John Feeney, business development manager at Guardian Vaults in Sydney.
Are you assuming they are all in it to make money? There is a huge amount of “agents of chaos” going on here. There appears to be enough people with disposable income willing to lose it to screw over the big investors.
That is somewhat of a new thing. Also new is the millions of disenfranchised Trump voters who no longer view this as a bad thing.
Now that the leftists hold all the levers of power illegitimately, a huge chunk of the population no longer has anything but contempt for everything “establishment.”
What is the stock symbol?
(Tinfoil being adjusted here)
So this is a great move to get people to sell their silver.
Then nobody will have any for when the economy truly tanks and money is worthless and one of the few things left with any value is silver.
Hmmmm, I think I will hang on to whatever I have in the meantime.
A sane person... what a breath of air.
Warning: You will be hated for saying Santa Claus is not real.
If the objective is to buy and hold physical silver, I think it’s a good idea, as long as they actually get physical delivery.
And on the books of big banks that have trading disks, giving rise to all those nutty conspiracy theories that the big evil banks are shorting the market, depressing prices.
Looking to get some inflation protection, on Saturday a.m. I ordered a $100 face bag of silver U.S. coins at $2120 from Apmex and got a confirmation and a "Waiting for payment" note. Semi long-winded disclaimer that my order was a contract and that I'd be held to it. (No problem, I want the stuff.) Wired the money within the hour via my bank, but being a non-business day, it wouldn't go through until Monday.
After that, I came to FR and read about the flap with GameStop Corp., when someone posted a similar problem with silver. Went back and checked the price and it had spiked $3 since I placed my order. This a.m. it's up another $3.
I fully expect a "Sorry about that, no sale" message. Worse case, "send another $500 and we'll ship."
I'll be surprised if they honor the sale. Anyone have any experience with them?
The reddit Wallstreet Bets said it is “not them” and “dont fall for it” They are still pushing AMC. So who is driving up silver?
$28.28 is the current ask....
Painful lessons waiting for those people - silver is massively different from GME and AMC stock.
Like I said previosly, Reddit says its not them pushing silver. I put my few extra bucks in AMC.
Speculation the hedge fund who got crushed in the game stop squeeze has a lot of silver so they are pushing.
I believe this indicative of another societal trend.
50-ish years ago the left brought on converts with the phrase “Question Authority”. It was used to encourage resistance to the Viet Nam war, embrace ecology, and demonize nuclear power and weapons, among other things.
The dirty little secret was that they really weren’t questioning “authority” per se. They were promoting an agenda and using those in authority at the time as targets. “Don’t look too close at what we are proposing...just get rid of these bad guys over here!”
Now, 50 years or so later, they ARE “authority”. They wrap their presumptions of authority in the flimsy gauze of “woke” science, but it is really a house of cards. More and more people are waking up to the fact that what they are being told is not so. The left is reacting like oppressive authorities do...they are labeling, demonizing and silencing the opposition.
All that to say that the opposition has discovered a tool with which to fight back. The left may try to wrest back control of economics, but such attempts can backfire.
We are in different times and are fighting on new battlefields.
To our valued customers,
APMEX Statement On Current Market Conditions:
In the last week, we have seen a dramatic shift in Silver demand from our customers. 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. 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. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.
Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. We have partnerships around to world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history.
As we evaluate the markets, it is difficult to know where Silver's price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.
We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.
Sincerely,
Ken Lewis
CEO, APMEX
Now that the leftists hold all the levers of power illegitimately, a huge chunk of the population no longer has anything but contempt for everything “establishment”.
My intuition is telling me government will step into the markets. One more lever of power.
Scwhab just sent me an Equity Rating Alert downgrading Hecla mining (HL) from a “C” to a “D”. Since the downgrade, Hecla has gone up 10% today and is at a 52 week high.
Yes. I've bought silver from them for several years. If you got confirmation, I'm reasonably sure they will honor it. I would be extremely interested if they do not.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.