Silver prices surged to an eight-year high today, silver-mining stocks leapt and bullion dealers were scrambling as small-time investors piled in to the metal.
Silver has become the latest target of a retail-trading frenzy that has set financial markets on edge.
Organised in online forums and traded with fee-free brokers, such as Robinhood, the phenomenon has driven a 1500% rally in the shares of retailer GameStop as the crowd scoops up assets big fund managers had bet against.
The gains in silver follow thousands of Reddit posts and hundreds of YouTube videos suggesting that a rise in the physical price could again hurt large investors with bets on it falling.
It also marks a foray into a much bigger and more liquid market.
Spot silver leapt more than 11% in London to $30.03 an ounce, taking gains to about 19% since last Wednesday and the price to its highest since February 2013.
The feverish buying extended to silver mining stocks in Australia and China and to online dealers.
Large US broker Apmex warned of processing delays while it secures more bullion and Money Metals exchange suspending trade until mid-morning.
"The Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market," said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne.
"This is their big, bold Moby Dick moment," he said.
Volumes in small miners' stocks in Australia were unprecedented and jumps in some exploration firms, which do not actually produce silver, topped 90%.
The popularity of dabbling in stock markets has grown during the Covid-19 pandemic as volatility, stimulus cheques and lockdowns have driven account openings and investment.
The craze hit fever pitch last week when the GameStop pile-on resulted in a "short squeeze," which turned price gains stratospheric as hedge funds with bets against the stock desperately bought it at high prices to close their positions.
Now it is silver's turn and once again the scale of buying is catching the professionals by surprise.
"We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen," Apmex CEO Ken Lewis wrote in a message posted on the broker's homepage.
"Once we exceeded our comfort levels, we had little choice but to stop the sale of silver," he said.
Online discussion had turned to silver late last week as Reddit posts suggested that higher prices could hurt banks with large short positions, and said buying easy-to-access exchange-traded silver funds could quickly ramp up the metal's value.
That occurred in Asia today with a record A$40m pouring into Australian ETF Securities' Physical Silver fund by afternoon.
Global short interest in silver, or the cumulative value of bets it falls in price, is equivalent to about 900 million ounces - just short of global annual production.
Banks and brokers hold most of that, with about 610 million ounces, but it is not clear whether they are net short on the metal or whether their bets offset very big physical holdings.
Broader markets swung from losses to gains in Asia as investors seem torn between whether the retail frenzy is an entertaining sideshow or a harbinger of doom.
