Global Shares Rally, Retail Surge Drives Silver To 8-Year High

Global Shares Rally, Retail Surge Drives Silver To 8-Year High

Via Reuters:

Global shares bounced and silver markets surged on Monday as retail investors expanded their social-media fuelled battle against Wall Street to drive the precious metal to an eight-year high.

Stock markets were roiled last week after a spike in retail demand to buy the stocks most bet against by hedge funds drove huge gains in companies such as GameStop Corp and prompted fresh concern that COVID-19 monetary and fiscal support measures were fuelling a market bubble.

With chatrooms abuzz with talk that silver was the new target, silver-exposed stocks, funds and coins jumped, helping push spot silver up more than 11%, with London-listed miners up strongly, including Fresnillo, up 18%.

After falling 3.6% last week – its biggest weekly fall in three months – the MSCI All-Country World Index was up 0.5% in early deals, tracking overnight gains in Asia.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.9% while Japan’s Nikkei added 1.5% and Chinese blue chips rose 1.2% after the country’s central bank injected more cash into money markets.

Futures for the S&P 500 and NASDAQ, meanwhile, both pointed to a stronger open on Wall Street, up around 1%.

While the retail battle versus Wall Street, coordinated over online forums such as Reddit, created some systemic risks, the bigger danger was in the tech sector, where some stocks had “eye watering valuations”, Deutsche Bank analyst Jim Reid said.

“Retail has in many parts driven such valuations in the last 10 months. If this pops the wider market will have bigger issues than last week.”

Gold followed silver higher, up 1% to $1,864 an ounce, while oil also tracked the gains in other commodities, with both Brent crude and its U.S. peer up around 1%. [O/R]

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