Silver prices jump in latest stock market frenzy
HOUSTON - First GameStop, now silver. Investors drove up the price of silver Monday in the latest effort to flip the power on Wall Street. But questions have surfaced about who really encouraged the investment.
Investors lined up at US Coins & Jewelry in Houston, mostly buying silver bars and coins.
"I've been a member of WallStreetBets for quite some time. I saw the buzz and figured I'd get ahead of it," said investor Ty Byrd.
"We've had a record number of website orders and a record number of people inside the store today. And everybody's buying silver," said Kenny Duncan of U.S. Coins & Jewelry.
Even more people were investing in silver on Wall Street. Silver futures jumped about 12% Monday morning to the eight-year high of more than $30 dollars per ounce.
Featured
Investing in the stock market for beginners
With the start of a brand new year, money is on the top of everyone’s mind. Whether looking for ways to invest it or multiply their money, they want make the most of it.
"Hopefully, this brings some things to light, you know, and makes everyone play fairly. Stop trying to game the system and take advantage of the little guy," said Byrd.
Last week, followers of the WallStreetBets forum on the social media platform Reddit bought up shares of GameStop, AMC and other struggling stocks, stunning hedge funds that had begun short-selling, or betting the stocks would go down.
Then more controversy stirred as discount brokerage app Robinhood limited how much of those stocks their customers could buy, while professional stock traders were able to stay in the market.
"I'm still today concerned about the 'Davids,' the retail investors, the ordinary people who invest in the stock market," said Representative Al Green (D - Harris County) at a press conference.
Green says he's preparing his questions for a Congressional hearing on February 18 into whether hedge funds have been manipulating the market.
"I think we will have an opportunity to do somethings that hopefully will improve the perception of the market being there for everybody to trade and everybody having a fair opportunity to succeed," said Green.
But some retail traders on Reddit called the rush to buy silver futures a "false flag," alleging hedge funds anonymously encouraged the buys after taking huge positions in silver themselves.
CLICK HERE FOR MORE SULLIVAN'S SMART SENSE
Some experts say silver cannot be "short squeezed" like GameStop because it's structured differently than the stock. There is also more than enough silver to meet industrial demand and producers can increase output to take advantage of higher prices. Previous efforts, such as the Hunt brothers who allegedly tried to artificially boost silver in 1980, have failed.
Investors are urged to be cautious and choose reputable dealers.
"Don't panic and be responsible. With a lot of hype, it's easy to panic. But I don't think anyone should panic. Be calm. Try to find the best deal, and don't panic buy," said Duncan.