A one-kilogram gold bar sits atop the silver bars of London Gold Investments bullion dealers in this photograph held in London, UK on April 4, 2013.
Simon Dawson | Bloomberg | Getty Images
Silver futures contracts rose Sunday night as it appears the Reddit-fueled boom in very short stocks is spreading to the metals market.
Silver futures rose 8% shortly after the opening of the futures market, the largest move in futures since at least 2013. Contracts were last traded at 6.8% .
The strong upward movement increases earnings from silver and silver-related stocks last week. Silver mining shares Coeur Mining and Pan American Silver rose 16.9% and 14.7%, respectively, on Thursday and Friday. The iShares Silver Trust jumped 6.7% during those two sessions.
The rise in silver demand appears to be related to retailers on the RedSit forum WallStreetBets, which has helped boost trading activity in very short stocks like GameStop and AMC Entertainment in recent weeks.
On Sunday night, the forum had several active threads dedicated to silver. The phrase “#silversqueeze” was also a trend on Twitter.
The silver movement was promoted by investors engaged in the rise in cryptocurrencies such as Bitcoin, which see new digital assets in part as substitutes for traditional metals.
Cameron Winklevoss, co-founder of cryptocurrency company Gemini, said on twitter that: “The ramifications of a #silversqueeze it cannot be underestimated. If it is exposed that there are more claims on paper about silver than real silver, not only would the reward be huge, but gold would be next. #Bitcoin fix this “.
The drastic rises in GameStop and other very short stocks were due, in part, to a small squeeze, which is a phenomenon in which investors who have bet on a stock are forced to buy shares to cover their positions in as the name increases.
Melvin Capital, one of the hedge funds that originally held short positions in GameStop, lost 53% in January.