It was the one print everyone was waiting for, and here it is: silver futures opened up 7%, surging from $27/oz to a high of $29.095 following a weekend of speculation that the next big squeeze on [WallStreetBets] radar is silver. And whether that’s true or not, may no longer matter in a world where — as described below — there is virtually no physical silver to be purchased. …
It would appear the run on silver has begun. With the market closed, traders have rushed to secure some exposure to silver ahead of what WSB suggests could be “the world’s biggest short squeeze” and that has left bullion dealers … facing massive shortages of physical coins.
Tyler Wall, the CEO of SD Bullion:
In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open. …
This is about ready to get really interesting as there was very little inventory left from suppliers/mints going into Friday close. …
Our sales for the month of January exceeded any one month last year during the heart of the pandemic. It was an all-time record month in our company history.
The thing is that no matter what happens with #SilverSqueeze, a lot of younger people are for the first time informing themselves that metals are the only true real money. That realization sticks for life, even when squeezes end. This is a red pill moment for many & its beautiful.
After creating massive short-squeezes in stocks like Gamestop, Blackberry and AMC, retail investors mobilized over social media started to focus on the silver market. Reddit’s Wall Street Bets has been one of the leaders of the organized mob with its subreddit discussion: ‘The biggest short squeeze in the world $SLV Silver $25 to 1000$.’…
There are also signs that investors are holding onto silver they own, rather than trying to take profits.
“Now we’re seeing nothing, no single offer, which is scary,” Peter Thomas, senior vice president at Zaner Group, said by phone from Chicago. “Whatever we sell, people are holding it. There’s no inflow of metal at all.”
Silver has been shorted and its price suppressed by agents acting for the central banks for two decades or more. Except for a three month period in 2011, when there was no one in charge of the silver suppression desk at JP Morgan — and the price rose from $20 to $50 USD per ounce.
The current situation could easily switch to short squeeze, in which the shorters are forced to buy silver and push up the price still higher. A silver price of $50 – $100 per ounce in three months time is quite possible, even more.
A silver squeeze would be resisted by not just a few Wall St hedge funds, but the entire world’s paper-money manufacturing industry (aka the central banks and governments). While a silver squeeze is do-able, this is a much bigger game.
Unlike shares of Gamestop and other companies, no one can simply print more silver. Silver mining has been in the doldrums for decades due to the artificially suppressed prices, so supply is scant. No one knows how scant, because silver is used up in industrial processes.
By the way, not so long ago silver was money. Both the US and Australian constitutions clearly say that only gold and silver is to be used as money. But the wordsmiths and judges long ago found that both documents actually mean something quite different, and government and banks can just print paper for money. What’s the difference, really? Common man.
UPDATE. Chris notes that the Chinese might choose to push the silver squeeze along, in order to destabilize the US dollar.
UPDATE: The WallStreetBets reddit guys say they don’t want to short squeeze silver right now, but are going to focus on Gamestop. After an initial move up (above), the silver price dropped back to its previous level of about $28. It’s not on.