SMM2 March 1: last week, retail investors in the United States continued to ferment, and retail investors on the Reddit forum began to call for "the biggest silver drive in history." Silver rose sharply. Silver has soared since last Thursday, rising more than 8% to more than $29 this morning, the biggest increase since 2013 and the highest since August last year. The main force of the Shanghai Bank rose sharply today, with the main contract rising 9.27% to 5939 yuan / kg, the highest since September 2020.
At the beginning of the incident, a user of the WSB forum said that the silver market is now one of the most manipulated markets in the world, with dozens of banks manipulating gold and silver prices to cover up actual inflation. In both the industrial and monetary sectors, the current easing of central banks around the world should push up the price of silver. The price of silver, adjusted for inflation, should be $1000 an ounce, not about $25 an ounce now. Retail investors can push the price of silver higher by keeping buying silver ETF (SLV). Silver ETF (SLV) inflows reached $1 billion in a single day on Friday, almost double the previous record high for the 15-year-old ETF, according to the data.
But the current surge is accompanied by a sharp increase in risk, as some long retail investors withdraw early or trigger a capital stampede. Agencies also warn that potential risks cannot be ignored. Deutsche Bank points out that the popularity of call options has driven up stock valuations, and that market makers who sell call options to individual investors are equivalent to short positions, and they must buy corresponding stocks in order to return their positions to neutral. In other words, if stocks continue to rise, market makers must buy more shares to maintain account balance.
While it is normal for hedge funds to lose short, the phenomenon behind the Reddit has raised concerns about the legality of group action and the disconnect between price movements and market fundamentals.
In addition, analysts pointed out that gold and silver fell as low as 64.09 from Monday, the lowest since August 2014. The ratio of gold to silver has fallen to a multi-year low, which is not sustainable. It will be a different challenge for retail investors to manipulate silver and manipulate a stock.
