Producers of metals and other raw materials rose as the latest Reddit-orchestrated short squeeze gave silver futures a lift.
The price of silver shot up by more than 7% on futures exchanges, with the precious metal registering the biggest percentage gain since the financial crisis of 2008.
Several prominent users of the WallStreetBets Reddit subgroup advocated buying silver in a repeat of the strategy the group used on GameStop stock, forcing bearish players to buy back bets against the metal.
But strategists warned that a "short squeeze" was a riskier proposition in commodities markets, where physical demand and other factors play a role in setting prices, and where previous attempts to corner the market have backfired on the speculators.
"The Reddit-fueled trader is learning that no one has a significant short position and that the silver market is much bigger than some of the small cap stocks they have been trading," said Edward Moya, senior market analyst at the OANDA Group, predicting that it was "closing time" for the day trader party, in a note to clients.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
02-01-21 1704ET
