WallStreetBets traders have apparently chosen a new sector since this morning, in which the attempt is now made to push short holders out of the market through targeted and coordinated buying…
This is the precious metals sector. If it looked in yesterday’s trading as if the gold price would soon test the mark of 1,800 U.S. dollars per ounce and silver the mark of 24.70 per ounce from above, the technical picture has now changed quite suddenly.
Someone only needs to look at the current gold and silver price trends to become aware of an increasing buying interest. Not only the precious metal prices, but above all a whole series of mining companies know how to profit from this current development.
For example, the share price of silver producer First Majestic was more than forty percent higher in today’s pre-market trading than the price registered yesterday. This is not a miracle, but rather a development based on the fact that the open short positions in the case of First Majestic are currently close to 25 percent in relation to the shares in circulation.
Individual traders and speculators using the WallStreetBets platform seem to have discovered the precious metals sector as one of the most heavily shorted market segments. Other mining stocks also know how to profit in pre-market trading, including among others MAG Silver (+9%), Wheaton (+3%), Hecla Mining (+5%) Endeavour Silver (+7%), Fortuna Silver (+5%) and Pan American Silver (+6.5%).
The shares of companies such as GameStop, which were “targeted” in the course of the past few days, seem to be a little sucked out for the moment after exorbitant and in each case by astronomical “short squeezes” triggered price explosions, which is why the interest among speculators now seems to decline after profit taking.
If there is a rotation into the gold and silver sectors among these “investors” now, the entire sector could be in for a rousing rise. A Twitter posting yesterday (see above) stated that the silver market per se.
“one of the most manipulated markets in the whole world”.
And for this reason, the silver price should not be at $26.xx per ounce – as it is currently – but at $1,000 per ounce. At the same time, the commentary pointed out that two birds could be killed with one stone after all, since (bullion) banks would be driven into bankruptcy in the event of an exorbitant rise.
DepthTrade Outlook
In what way gold and silver are ultimately driven to fair valuations, long-time investors in this sector can really care little. Despite all that, it’s worth noting here that even speculation-driven gains should be used for partial profit-taking at most, as physical precious metals serve as a hedge and hedge against a financial crash and/or inflation/deflation (unlike in the case of e-minis).
All in all, it just goes to show how broken these “markets” are after all. Retail investors and speculators, however, seem to have learned a lesson from the past few decades. The power of the banks and hedge funds must be opposed not individually, but in a concentrated form, i.e., in an alliance.
From today’s perspective, the Internet and technological development obviously offer adequate opportunities for this. Or how else could it be that a greedy and whipped-up mob can cause one hedge fund after another to go into trouble these days and drive the financial world before it? Interesting observations, indeed….
I personally don’t believe the WallstreetBets crowd buying-power is strong enough to push the silver market more than a day. But long-term: Yes, Silver is too low!
