(Kitco News) Silver received an unprecedented amount of attention this week. But one big misconception in the whole silver saga was that the Reddit community was united in the call. In fact, most of Reddit posts from this week warned against buying into silver because it was a distraction from its original GameStop play.
So, let’s take a look at why the silver squeeze didn’t happen and why prices fell after briefly hitting above $30 an ounce.
First, the main issue has been that the silver market is more liquid, which makes it very different from plays like GameStop.
Second, the sheer size of the silver market is another big obstacle. If we look at the average daily volumes on Comex silver since the start of 2020, they come to around $11 billion dollars.
And third, the Reddit disagreement. The Wall Street Bets community even ended up taking down the famous post titled ‘The biggest short squeeze in the world is in SLV,’ which seemed to have triggered the whole move into silver.
Yet, analysts remain confident that silver will reach the $30 dollar mark and move closer to $50 this year. As to why? Supportive macro forces — more industrial demand, Biden’s move towards green technology as well as silver’s safe-haven properties.
Plus, all this new investor attention is bound to bring more people into the space, which has been lagging behind gold for some time.
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