LONDON\/TORONTO (Reuters) – A social media-driven buying spree lifted silver to an eight-year high on Monday, though prices later pared gains on doubts about the ability of retail traders that have been focused on stocks to sway prices in the bigger, more liquid commodity.<\/p>\n
Silver prices climbed to an eight-year peak of just over $30 an ounce before cooling off a little to trade up 6.3% at $28.70.<\/p>\n
At the same time, video game retailer GameStop Corp, at the center of last week\u2019s \u201cReddit rally,\u201d slid 30.8% to $225, but other shares caught up in the frenzy that has battered short-sellers extended their advance, including BlackBerry Ltd.<\/p>\n
A lot of people who were anticipating a GameStop-like rally in silver \u201cnow realize there is not as much buying pressure pushing it up like some had thought,\u201d said Michael Matousek, head trader at U.S. Global Investors.<\/p>\n
It was not clear how long the Reddit-fueled rally in stocks shorted by hedge funds would last. It could mean more losses in the wider market this week if funds have to keep selling to meet redemptions or right their portfolios. Longer-term, they may have to shift strategies.<\/p>\n
Share prices swung wildly last week when small-time traders, who organised in online forums and traded with fee-free brokers such as the Robinhood online brokerage, saddled several powerful hedge funds with losses on their short positions.<\/p>\n
On Monday, however, the effect of the struggle on the wider U.S. market abated, with stocks ending sharply higher.[.N] AMC Entertainment Holdings Inc was flat, having risen more than 500% this year. BlackBerry shares were higher in New York and Toronto trading.<\/p>\n
Robinhood continued to roll back trading restrictions on some retail-driven stocks on Monday, raising its trading limit on GameStop to 20 shares from four. It also raised trading limits on AMC and Koss Corp.<\/p>\n
Investors who have been short shares of GameStop cut their year-to-date losses on Monday with a mark-to-market gain of $2.71 billion after the stock tumbled, according to analytics firm S3 Partners. Mark-to-market losses for short-sellers year-to-date stand at $12.6 billion, the firm said.<\/p>\n
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