Silver prices surged to a fivemonth high on Monday, silvermining stocks leapt and coinselling websites were swamped as smalltime investors piled in to the metal, the latest target of a retailtrading frenzy that has set financial markets on edge.
Organised in online forums and traded with feefree brokers, such as Robinhood, the phenomenon has driven a 1500 rally in the shares of videogame retailer GameStop as the crowd targets assets big fund managers had bet against.
The move into silver, following thousands of Reddit posts and hundreds of YouTube videos suggesting that a rise in the physical price could hurt large investors with bets on it falling, is a foray in to a much bigger and more liquid market.
Spot silver leapt as much as 7.4 in Asia to 28.99 an ounce, taking gains to about 15 since last Wednesday and the price to its highest since mid August.
Silver mining stocks soared in Australia and China and Money Metals, an online exchange for precious coins and bullion, posted an EXTREME DEMAND ALERT banner across its homepage, and announced it restricted orders to between 1,000 and 10,000.
The Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market, said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne.
This is their big, bold Moby Dick moment, he said.
Volumes in small miners stock in Australia were unprecedented and jumps in some exploration firms, which do not actually…