Silver price is trading more than 9% higher on Monday as it seems that the silver metal is the latest asset that is enjoying support from Wallstreetbets investors.Fundamental analysis: #silversqueeze
“Better late than ever,” is an old saying that may best describe today’s price action in silver. Reddit investing community ‘Wallstreetbets’ has turned their attention to silver today as they continue to wreak havoc on financial markets targeting short-selling hedge funds.
The ”#silversqueeze” has been trending on Twitter while there are multiple threads opened on Reddit discussing silver price action. However, it appears that not all WSB investors were impressed with the #silversqueeze activities.Source: Reddit Wallstreetbets
For bullion brokers, these are “unprecedented times.
“In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week,” Ken Lewis, CEO of the US-based bullion broker Apmex, said.
According to him, the company is now experiencing delays in processing transactions and they were forced to stop the sale of silver amid a “dramatic” surge in demand.
“As we evaluate the markets, it is difficult to know where Silver’s price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts,” he added.Technical analysis: Multi-year highs
Silver price is trading almost 10% higher at the moment after it exceeded the $30.00 handle for the first time since early 2013. Last week, silver prices added almost 6% after a rally on Thursday and Friday.Silver weekly chart (TradingView)
Technically, the silver price has broken out of the ascending triangle and it is now in the breakout territory. The measured target of this chart pattern comes above the $35 mark, where the 2012 highs are located. It also coincides with the key 61.8% Fibonacci retracement line and this is likely to be the next major target for silver buyers.Summary
Silver price is up almost 10% as WSB investors turn their focus to precious metals.
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