Sharp correction after silver price take-off! What's next?
Sharp correction after silver price take-off! What's next?

The price of silver returned to a sharp correction today, as small investors took a step back by abandoning the precious metal, thus accelerating its fall from the eight-year high found at Monday's meeting, amid the frenzy caused by the investment communities.

Social media and especially Reddit. Silver's price fell 8% to $ 26.74 an ounce, after yesterday it had surpassed the $ 30 barrier, moving to the highest level since February 2013.

The 18% rise led the fall in the price of silver in the holding margin in futures Chicago Mercantile Exchange (CME). "The party seems to be coming to an end. This is the game. It can work for a while until it stops and then the countdown begins and very quickly ", says Paul Nolte, portfolio manager of Kingsview Asset Management.

Other analysts said the move was doomed to fail, but the question was how quickly it would happen. The setback also shows how difficult it is for small investors, even when they join forces, to influence the global silver market, with daily trades' value at $ 6 billion.

"If Reddit investors try to push the silver market up again, the result will be a hole in the water. "They will only succeed in boosting volatility and some small disruption in supply and demand dynamics," said Goldman Sachs. Analysts and stockbrokers, however, were most concerned about what happened to silver.

And this, because unlike GameStop, there were no big short positions for silver futures. Some posts made in the WallStreetBets community on Sunday night and Monday showed that hedge funds selected the moves and that there was no coordinated effort of small investors in the silver market. Correspondingly, the spot price of gold in London fell 1.2% to $ 1,837 an ounce.

An HSBC analyst said that silver is likely to weaken if gold fails to return to higher levels. This means, he said, that silver is not cut off from the rest of the precious metals market.

Will you join the Bitcoin revolution? It's up to you to get on board the crypto train! To do so, and start learning about this exciting world, don't wait to create an account on Binance, the leading Bitcoin and crypto exchange. Click here to signup and safe from the trading fees.


Nathan George

Blogger and Influencer

Related Post
Join to Us

Stay Updated on all that's new add noteworthy

Subscribe Now