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3 Feb, 2021 12:03

Is Reddit crowd behind silver short-squeeze? RT’s Boom Bust investigates

Is Reddit crowd behind silver short-squeeze? RT’s Boom Bust investigates

A buying frenzy has swept the silver market as the Reddit community rushed over to commodities, with the price of the white metal soaring to an eight-year high this week.

RT’s Boom Bust talks to David McAlvany, CEO of McAlvany Financial Group, about the buying fever that has captivated the financial world lately.

“These swings are a [different] order of magnitude compared to what we usually see in the silver money,” McAlvany says, adding: “I’m wondering if the Reddit crowd doesn’t have a little bit of a problem with attention deficit disorder.”

There is activity there, he says, “but I think, by definition, we are talking about ‘hot money’ which is short-term, opportunistic…”

McAlvany explains that the big story for silver is what happened in 2020, when its price was up 45 percent for the year, while gold was up only 24 percent. “Because what you have as a backdrop is pretty significant.”

The moves by long-term investors, suggest there are reasons to own the metal, he says. “As for the short-term crowd, maybe they will accidentally end up owning a great asset, but I don’t know if they have the staying power. If they actually sit on their hands, it might do them some good.”

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