Silver explodes; these silver miners are seeing best gains
(Kitco News) Reddit's silver short squeeze move has been mainly focused on buying up the physical supply. Still, the rally is spilling over into miners as a new wave of investors begins to look at the lagging silver market.
On Monday, silver surged to eight-year highs of $30.35 an ounce. March silver Comex futures were last trading at $29.10, up 8.12% on the day.
The largest silver ETF (SLV) also saw its largest single-day inflow in history on Friday, which totaled near $1 billion.
All the attention even led to #silvershortsqueeze trending on Twitter overnight.
"The growing interest from the Reddit subforum briefly saw prices hit north of $30/oz for the first time since 2013. While an engineered short squeeze in silver is a more difficult task relative to last week's tumultuous squeeze in several highly shorted and illiquid stocks -- the motives are muddied by hedge fund and bank bullishness -- the effort can certainly keep prices and volatility elevated in the near-term," TD Securities strategists said on Monday.
Retail frenzy even overwhelmed online sellers of silver coins and bars, said SP Angel analyst John Meyer. "The weekend saw online sellers of silver coins and bars run out of stock across the world," Meyer said.
Analysts have warned investors that chasing the silver market can be dangerous, adding that the short squeeze in silver will be a lot harder to achieve than in the stocks like GameStop ( NYSE: GME).
"Silver differs in important ways from struggling U.S. retailers like GameStock, with many funds bullish on precious metals, and Bloomberg reports that money managers have had a net-long position on the metal since mid-2019," noted Meyer. "Analysts are also questioning the retail crowd's ability to squeeze the silver market, with the value of silver sitting in London vaults alone currently at $48bn, compared to GameStock's market cap of $1.4bn in mid-January."
Even the WallStreetBets (WSB) subreddit seems to be divided on the topic, with many users speaking out that the silver short squeeze call is a distraction from the original GME play. The subreddit even took down the popular "THE BIGGEST SHORT SQUEEZE IN THE WORLD $SLV Silver 25$ to 1000$" post, which seemed to have triggered all this silver talk last week.
Also, posts like "stop buying SLV" have made it to the top of the discussion board with 34.9K upvotes. One of the main concerns the WSB has is that Citadel Advisors LLC, which gave cash to Melvin Capital amid the GameStop short squeeze, is also a significant holder of SLV and could benefit from the precious metal's rally.
Yet, despite these debates, the silver price was not the only one seeing massive gains on Monday as silver miners also surged. Here's a look at some top silver miner rallies as of Monday.
Pan American Silver Corp (TSX: PAAS.TO) was up 9.84% and trading at $45.44.
Fresnillo Plc (LON: FRES) was up 8.58% and trading at $14.94.
First Majestic Silver (NYSE: AG) was up 21.58% on the day and trading at $22.03.
Hecla Mining Company (NYSE: HL) was up 24.96% on the day and trading at $7.11.
Wheaton Precious Metals (NYSE: WPM) was up 5.16% and trading at $43.19.
Endeavour Silver Corp (NYSE: EXK) was up 19.39% on the day and trading at $5.91.
Fortuna Silver Mines (NYSE: FSM) was up 14.65% on the day, trading at $8.92.
MAG Silver Corp (AMEX: MAG) was up 10.33% on the day and trading at $21.69.
Avino Silver & Gold (AMEX: ASM) was up 53.63% on the day, trading at $1.8896.