Silver prices rally as r/WallStreetBets shift focus to the metal
- Silver prices are up by 1.91% but are still below the $26 resistance level.
- r/WallStreetBets growing community has shifted its focus to the silver market.
- Silver prices are facing resistance as the US dollar strengthens.
Silver prices are rallying as the day traders on r/WallStreetBets shift their focus to the precious metal. As at 18.07 GMT, the prices were up by 1.91% to $25.74. Today’s high is around the psychological level of $27.
r/WallStreetBets’ impact on markets
Recently, unloved stocks such as GameStop, Nokia, BlackBerry, and AMC Entertainment have soared significantly with no fundamental basis. For instance, on Wednesday, Nokia share price reached $8.81 after recording a 90% rise. This week, the stock has gone up by over 70%. Similarly, BlackBerry’s stock price has risen by 89% within the same period.
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The baffling stock performance is due to the push from the traders on Reddit. Notably, the platform has grown in membership overnight. Since Wednesday evening, 1 million people have joined the community. This now brings its total members to 4.4 million.
Silver: r/WallStreetBets new focus
Day traders on Reddit’s WallStreetBets forum now seem to have shifted their focus to silver. On a recent post, the traders are striving to push the precious metal’s prices from the current level of about $25 to $1,000.
The underlying assertion is that silver’s bullion market has been subject to manipulation by key banks such as JP Morgan. In 2019, traders allied to the bank were charged with silver price manipulation. While the bank settled the lawsuit in the past year, it seems traders are yet to put the issue behind them. Similar to the case of GameStop and the other targeted companies, the silver market could now turn into a game of Wall Street versus the main street.
On the one hand, it seems difficult for the short squeeze to succeed against JP Morgan. However, investors looking to trade silver are keen to see if its narrative will be similar to that of GameStop.
Silver’s inverse relationship with US dollar
Silver prices are facing resistance as the US dollar strengthens. The precious metal has an inverse relationship with the greenback. The dollar’s gains are a reaction to the Federal Reserve’s decision on interest rates. The bank announced its decision to leave interest rates unchanged. Besides, the r/WallStreetBets situation has increased the dollar’s safe-haven appeal.