As the asset’s price rises, these traders become increasingly desperate to buy it back to close their positions, which in turn fuels the rally even further. If the buying is aggressive enough, this can lead to a short squeeze, amplifying the upward momentum. Although Friday’s trading began like any ordinary day, volume surged in the afternoon as it became evident that silver’s breakout above the $32.50 resistance level had staying power. It’s likely that a good portion of this volume came from traders scrambling to cover their short positions—a topic I’ll explore in greater detail later in this article. The heavy trading volume serves as a crucial confirmation of silver’s breakout, signaling that major institutions or ‘smart money’ are getting on board. A significant portion of Friday’s silver buying volume was likely driven by short-covering.

Silver is surging but users on WallStreetBets say they’re not behind the rally

• Because miners aren’t producing enough silver for the needs of the human race,” he said.
• Earlier this week, shares of GameStop (GME) and AMC Entertainment (AMC) surged once again, echoing the frenzy of 2021.
• However, rising inflation has led the Fed and other central banks to hike rates, which has negatively impacted gold and silver.
• This can result in significant volatility, attracting more traders into the market, further amplifying price movements.
• There is a strong chance that these banks will end up on the wrong side of the trade as this rally continues, triggering a powerful silver short squeeze.

And even if you were to ignore all these facts, it’s impossible to overlook the dwindling supply of silver. ” emojis are certainly exciting, they’re not really the crux of what’s going on in the movement. Many of those involved say they want nothing more than for the price of silver to return to a fair and accurate level.

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Other posts were in favor of bidding up silver, and one user on Friday night referenced the Hunt brothers’ attempt to corner the silver market in 1980. The move higher extended gains for silver and silver-related equities late last week. The iShares Silver Trust, an ETF that retail investors can easily buy that seeks to track the price of silver, rose 8.1% on Monday after popping 6% last week. Shares of precious metal miners that stand to benefit from higher silver prices soared Monday, with both Coeur fullerton markets review Mining and Pan American Silver up by double digits.

This shrinking supply will intensify the impending silver short squeeze, driving an even more dramatic price surge. For a deeper dive into silver’s bullish fundamentals, be sure to check out my article from earlier this year. I believe that chart analysis is a tool that is helpful for determining if a large move is likely ahead in the silver market. After all, this type of analysis helped me spot Bitcoin’s recent run-up ahead of time. Right now, silver futures are trading in a range between the $22 support level and the $30 resistance level that formed at the peak in early-August.

Surging industrial demand, coupled with declining global mine production, has kept silver in a structural deficit for the past four years—and there’s no sign of relief on the horizon. In 2023, the deficit reached 184.3 million ounces, with an even larger shortfall of 215.3 million troy ounces projected for 2024. The silver deficit in recent years has rapidly depleted above-ground supplies, tightening supply even further.

In October, Lynette Zang, CEO of Zang Enterprises, spoke with the Investing News Network about her outlook for gold and silver prices. “We’ll see, but it wouldn’t surprise me to see the spot market break US$3,000 (per ounce) by the end of this year,” she said about gold, adding that silver could finish 2024 at the US$50 per ounce level. Silver is different in many ways from individual stocks like GameStop, AMC, Blackberry and many more. For instance, having a short squeeze in silver could be difficult because it’s a much deeper and more highly liquid market. For instance, GameStop’s market cap was $1.4 billion in mid-January, but this increased 16 times over when Reddit traders started to talk up the stock.

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Silver Demand for Photovoltaics Increased 64% YoYIn 2023, industrial silver demand rose 11%, reaching a new record, as reported by the World Silver Survey 2024. Leading the surge in demand was silver’s usage for photovoltaic applications in solar technology, up 64% from the previous year. Although the Synthetic Silver Price Index didn’t break out on Friday, it still posted a solid 1.21% gain. Given the sheer strength of silver’s breakout, I’m choosing to overlook this criterion for now. I expect a breakout in the index is still forthcoming, Forex backtesting software which will further validate silver’s rally and likely provide additional momentum to its current upward trajectory.

The Silver Short Squeeze: What Is It All About?

Both of these have fallen considerably since, I believe in the market’s view that the Fed has stopped hiking rates, with the expectation that rate cuts will come sometime in 2024.” Speaking to INN in late December 2023, Krauth was looking forward to a rally in silver for 2024. Many experts in the space expect silver to perform strongly in the years to come, but don’t necessarily see it reaching US$100 or more, especially given the current macroeconomic conditions. In line with its view on silver, First Majestic is a member of a consortium of silver producers that in January 2024 sent a letter to the Canadian government urging that silver be recognized as a critical mineral. Silver’s inclusion on the list would allow silver producers to accelerate the development of strategic projects with financial and administrative assistance from the Canadian government. Canada’s critical minerals list is expected to get an update in the summer of 2024.

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“Silver also faced additional pressure from Donald Trump’s election victory, as markets anticipated inflationary policies and a more aggressive stance toward China, which could dampen demand for the metal.” While central bank actions are important review global asset allocation for gold, and by extension silver, another key price driver lately has been geopolitical uncertainty. The past few years have been filled with major geopolitical events such as tensions between the US and other countries such as North Korea, China and Iran. More recently, the huge economic impact of the COVID-19 pandemic, Russia’s war with Ukraine, the banking crisis in early 2023 and rising tensions in the Middle East brought about by the Israel-Hamas war have been sources of concern for investors. Looking first at the Fed and interest rates, it’s useful to understand that higher rates are generally negative for gold and silver, while lower rates tend to be positive.