A few fun and games with the silver price...

Reddit crew may find commodities harder after roiling silver

Signs that the silver market was about to get hit by a GameStop-style short squeeze emerged on Wednesday.

That’s when comments began appearing on the Reddit forum r/wallstreetbets -- the investor board now famous for tripling the video game company’s shares this week.

People started egging each other on to pile into silver’s largest exchange-traded product. Banks have been keeping silver prices artificially low, they said, masking an actual shortfall of supplies. Help put an end to “THE BIGGEST SHORT SQUEEZE IN THE WORLD,” one poster said.

To say there was a strategy would be overstating things. At about 8.30am New York time on Thursday, day traders bent on teaching some banks a lesson began flooding iShares Silver Trust. Their buying drove up prices of the underlying metal by as much as 6.8 per cent, the most since August.

And just like that, an ETF became the Trojan horse that helped the Reddit hoards break through the gates of the commodities world for the first time since they began upending equities.

It’s not clear whether Reddit investors will target another commodity again. Spot silver extended gains on Friday, rising as much as 4.3 per cent, while iShares Silver Trust gained 2.4 per cent in early New York trading. First Majestic, a silver miner that surged 21 per cent on Thursday, rose as much as 13 per cent on Friday. Plenty have posted on the same board about piling into other markets, including corn.

But good luck moving those commodities, consultants and analysts say.

Exchange-traded funds make it easy for retail traders to access commodity futures markets in an indirect but meaningful way, said Ryan Fitzmaurice, commodities strategist at Rabobank.

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