Wild Silver Market Swings: Fast Breaking News, What To Expect Next

 As extreme market conditions drive tremendous volatility in silver spot prices, buyers are exerting unprecedented pressures on retail physical bullion products.

Record-setting buying volumes pushed the silver price toward a multi-year breakout on Monday. Silver hit an eight-year high of over $30/oz during the day, closing at $29.41.

On Tuesday, however, the silver market got slammed – along with stocks that had been heavily bid up based on internet discussion board campaigns. As GameStop (GME) shares suffered a 60% meltdown, silver plunged by close to 10% to just under $27/oz.

As of Wednesday morning, silver has recovered slightly to $27.15. Meanwhile, coins, bars, and rounds continue to be in very short supply, and premiums are elevated.

Silver, Bars, 5000 Grams, Real Value

Image Source: Pixabay

For an in-depth discussion on the developments in recent days, watch my interview on Arcadia Economics here.

What happens next? Was the recent price spike and demand surge in silver a fleeting Reddit-driven fluke?

Much of the mainstream financial media’s coverage of the moves in the silver market has focused on the “WallStreetBets” angle – implying silver is just another ticker symbol subject to being pushed higher by day traders for no fundamental reason.

In fact, real physical demand for the white metal is manifesting outside of Robinhood accounts. While exchange-traded funds linked to silver saw enormous inflows, so did bullion dealers. By Monday, inventories of most common silver bullion products were cleared out.

Buyers of coins, rounds, and bars aren’t the sort to trade in and out of their holdings based on daily blips. By and large, they are long-term holders who believe in the fundamental value of physical precious metals as contrasted with nontangible financial assets that trade on exchanges.

If you have recently bought or plan to buy silver solely because you hope internet chatter will quickly drive prices higher, then quite frankly you may be making a mistake.

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Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

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