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“The Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyze something of a short squeeze in the silver market,” said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne.
“This is their big, bold Moby Dick moment,” he said.
The popularity of dabbling in stockmarkets has grown globally during the COVID-19 pandemic as volatility, stimulus checks and lockdowns have driven account openings and investment.
The trend has turbocharged a long equities rally, and begun to make brokers in places like South Korea a little worried as investor loan volumes rise to record highs.
The craze hit fever pitch last week when the GameStop pile-on resulted in a “short squeeze,” which turned price gains stratospheric as hedge funds with bets against the stock desperately bought it at big prices to close their positions.
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“The turnover suggests that it’s not just Redditers that are involved now,” said Michael McCarthy, strategist at broker CMC Markets in Sydney.
“Having said that, the 5% gain in silver prices is a very solid lift, particularly when gold prices are static, it certainly does suggest that the impact of messaging in social media is becoming much more significant.”
Among some of the strongest small mining stock gains were Thomson Resources, which soared as much as 60% – or eight Australian cents – and Investigator Resources Ltd which jumped nearly 40%.
Both are explorers which did not produce silver for sale in 2020.
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