A lot of folks are waking up Monday morning, Feb. 1, 2021, startled by what happened to the silver markets over the weekend. And it all stems from a series of posts that went viral on the social media site Reddit. Early last week, a rogue group of investors — many Millennials and never having invested in stocks before — dumped money into shares of GameStop (NYSE: GME), AMC Theaters (NYSE: AMC), and BlackBerry (NYSE: BB) on a call to storm the market on these and other low-value stocks. The crush of investors sent prices sharing, with GameStop hitting nearly $350 a share, up almost 2,000% from its price of $18 just three weeks earlier.
Trading was halted on GameStop and other low-cost shares by last Thursday. Within hours Reddit user responded by suggesting physical silver is vastly undervalued and that it should be squeezed toward higher market prices. Within 24 hours, bullion suppliers were running low on silver supplies. By Sunday morning, the major players were freezing sales.
APMEX, one of the largest bullion dealers in the United States, sent the following message to its customers that Sunday evening:
“In the last week, we have seen a dramatic shift in silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.”
Universal Coin & Bullion principal Michael Fuljenz says demand is through the roof. “A dealer friend of mine told me had 20 people lined up at his shop,” Fuljenz remarks. “Morgan Dollars, Saints, and Libs are all up due to the huge demand,” says Fuljenz.
“This is unprecedented,” says longtime precious metals expert Michael Garofalo, who believes silver was already situated for gains even without the sudden spurt of interest. “Industrial demand for silver is skyrocketing with increased production in things like electronics and solar panels.”
“How much silver is there to go around?” asks daredevil investor James Passin. “The silver market is tight, and this creates and interesting situation. Oil went negative last year, and now we’re going the other way.” Is this all just the tip of the iceberg? “The big picture is that fiat money purchasing power is declining and we’re going to see inflation.”
Editor's Note: Look for more coverage of this topic on this website, as the situation develops, and look for a more extensive review of this history-making situation in the April-May 2021 issue of COINage, in production now.