(Kitco News) Despite a surge in interest and trading volume in silver, the squeeze in the metal is unwinding, according to analysts.
“The evidence suggests the squeeze has failed,” said TD Securities commodity strategist Daniel Ghali. “The #silversqueeze virality has already peaked with Google searches already trending lower.”
The main issue has been that silver’s market is more liquid, which makes it very different from the GameStop play triggered by Reddit’s WSB movement.
“The tenets of a successful squeeze are: A viral narrative as a catalyst, high short interest, an illiquid security and an active options market. These principles don’t bode well for the attempted squeeze on silver, especially given silver’s massively more ample liquidity profile,” said TD Securities’ Daniel Ghali.
Liquidity and size of the silver market are critical factors, said ING senior commodities strategist Wenyu Yao. “The biggest hurdle being the sheer size of the market. If we look at daily average volumes on Comex silver since the start of 2020, they equate to around US$10.97b.