If the Federal Reserve prints too much money the price of silver will go up, but that can take many months.
Photo: JOEL SAGET / AFP / Getty Images
After the price swings of companies GameStop Y AMC Entertainment were in the sights of the financial world last week, investors have now set their sights on the the payment.
During the weekend the price of the metal experienced an increase. Monday the price of silver shot up to 11.5% until reaching the highest level in eight years.
The metal was priced at $ 29,418 per ounce, an additional 9%, reaching the levels reached at the beginning of 2013.
However, in some of the discussion forums of investors of Wall Street they have dismissed the growth in the price of silver as a way to depressurize stocks in companies like GameStop.
Some investors mention that this is a trap set by which hedge funds are losing money with the rise in shares of GameStop and they have asked to keep the focus on the companies that had put the video game retailer’s shares in control.
Randi Mailloux, a Westfield investor, told the newspaper The New York Times that Wall Street firms were behind the silver price boost, saying that the big hedge funds are trying to make people lose interest in silver stocks. GameStop“.
Additionally, the Commodity Futures Trading Commission reported that they are observing the activity of several companies, including GameStop, in addition to monitoring the price of silver in search of possible fraud and manipulation in the market.
Last week stock trading like BlackBerry, AMC Y GameStop shook the financial market and forced platforms like Robinhood to limit their operations.
Rising stock prices hit hedge fund short sellers and baffled markets across the board, pushing the index up. S&P 500 to red numbers.
What about silver?
The market of the the payment It is different from the companies that have benefited from the platform operators Reddit. The price of silver has been going up even before investors turned to see it as an option. Last year its value increased by almost 50%.
The silver market it is much bigger, making it more difficult for a small group of operators to influence it.
To top it all off, there is a logistics hurdle in commodity trading as retailers hoping to raise its price would have to receive the metal rather than buying shares in online accounts or purchasing options contracts.
Related: A note explained it all, a young man commits suicide after seeing his negative balance of $ 730,000 dollars in his investment account.
Hoarding, a terrible experience
The silver market has been restricted after it registered speculation in the 1980s following the attempt of the brothers Nelson and William Hunt, who inherited an oil fortune and tried to monopolize the silver market, as the site recalls. MarkWatch.
The Hunt Brothers accumulated almost half of the world’s commercial silver supply before the practice was thwarted on March 27, 1980 by market regulators who intervened and restricted purchases.
The metal fell from a price of $ 50.35 dollars a $ 10.80 dollars per ounce, costing the Hunts $ 1 billion in losses, as recalled by the site Investopedia.
Who gained from the rising price of silver
On Monday an effect on silver caused shares of companies that extract the metal to rise. It is the case of Fresnillo Group, the Mexican company that increased its shares by 8% and Polymetal International went up 5%. Both companies registered the largest increase in the British index FTSE 100, as reported ShareCast. On the New York Stock Exchange the shares of Silvercorp Metals increased by 15% and Fortuna Silver Mines by 12%.
The increase in demand for the payment it has forced some companies to stop accepting new orders for the metal.
Another factor to take into account is that if the Federal Reserve prints too much money, the price of the the payment, gold and other raw materials will also increase considerably, but for that to happen it will take several months since the effect is not immediate, as he pointed out in a comment Steve Forbes.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.