Day traders drive silver to an 8-year high, but not all Redditors are convinced the 'silver squeeze' will work

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Silver prices jumped as Reddit day traders locked on to a new target

The silver price jumped 11% on Monday to an 8-year high, pushing up silver mining companies’ shares and causing retail sites to limit trading, as amateur investors piled into the market in the latest effort to squeeze Wall Street.

But the “silver squeeze” proved controversial on the Reddit forum Wall Street Bets, with many users arguing the army of day traders should keep targeting GameStop shares and not shift their sights elsewhere.

Last week, traders organizing themselves on Reddit realized their power when they bid up GameStop shares by more than 200%, hitting hedge funds and others who had been betting the price would fall for more than $19 billion.

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On Monday morning, the pivot towards other targets picked up speed, with the hashtag #silversqueeze trending on Twitter. Online financial personalities were cheering on day traders, with bitcoin investor Cameron Winklevoss tweeting: “If Silver market is proven to be fraudulent, you better believe Gold market will be next.”

The benchmark silver futures price was up 10.7% in early trading to $29.78. It was the biggest one-day rise since 2009 and took the silver price to its highest level since 2013.

It has risen around 17% over the last five days as Wall Street Bets members encouraged each other to buy up silver in the belief that major financial institutions are betting the price will fall.

The latest data from the US regulator showed money managers are betting the price will rise, however.

BlackRock’s iShares Silver Trust was up 9.48% in pre-market trading. The world’s biggest silver exchange-traded fund saw inflows of close to $1 billion on Friday.

Shares in silver companies jumped. Miner Fresnillo’s London shares soared 17.81% while Polymetal International was 6.93% higher.

Silver retail sites were left struggling to keep up with the demand. Money Market said it would not be taking any further silver orders until mid-Monday morning due to “extreme demand”. APMEX said it was expecting processing delays of up to three days.

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Yet the move into silver was controversial on the Reddit forum Wall Street Bets. Some users noted that huge investment banks, and the hedge fund Citadel Advisors, were the biggest holders of the iShares Silver ETF.

“By buying silver/going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME,” one user posted. Others said the Reddit army should focus their efforts on driving up the GameStop share price, which was around 8% higher in pre-market.

Milan Cutkovic, market analyst at trading platform Axi, said silver is a “far more difficult” market to move than smaller stocks such as GameStop. Yet he said that “last week’s events showed that the impact of the retail frenzy should not be underestimated.”