Is silver set to become the next GameStop?

• Reddit users point out that silver is one of the most oversold markets, which is worth to pay attention to.

• Silver price growth could be achieved through huge ETFs holdings increase. Currently ETFs possess silver worth $24 billion. SLV, which is the biggest fund, holds silver worth $14 billion.

• Short positions relative to average daily volume for SLV amount to roughly 60% (for gold it is as much as 114%). At the same time, short positions relative to all SLV units equal roughly 4% (the biggest figure among precious metals, for gold it is 3.5%).  

Almost 4% of all SLV ETF units are short positions (second chart from the top). At the same time, it amounts to roughly 60% of the average daily turnover. Source: Bloomberg

• It is worth to compare that with futures and options short positions relative to annual silver production. Short positions amount to almost 20% relative to production. It is the highest figure among all precious metals, yet the number is well below record highs. Still, silver is quite an interesting asset in terms of possible further price growth. The distance between current levels and all-time highs suggests that it might potentially rally as much as 100%.

Short speculative positions on futures and options relative to annual silver production amount to almost 20%. However, it is the highest figure as far as precious metals are concerned. Source: Bloomberg, XTB