Buying into 'poor man's gold', Chinese investors jump on silver

Lamy

02/02/2021 24:29

(Repeats earlier story for wider readership with no change to
text)
    By Emily Chow
    SHANGHAI, Feb 1 (Reuters) - Chinese investors rushed into
silver investments on Monday, pushing up Shanghai silver prices
while boosting performances of related stocks and funds,
matching calls by global retail investors to boost prices of the
precious metal. 
    Retail traders on Reddit and other social media who caused a
rally in share prices of U.S. video game retailer GameStop Corp
 GME.N  have now turned their attention to silver, leading
Chinese investors to also jump on the bandwagon.  urn:newsml:reuters.com:*:nL4N2K34F0
    China's domestic silver prices rose to their highest since
September. Prices on the Shanghai Futures Exchange  SAGcv1 
closed up 9.27% at 5,939 yuan per kilogram.
    Spot prices on the Shanghai Gold Exchange  XAGTD=SGEX 
surged to an over four-month high on Monday before ending
afternoon trade up 9.4% at 5,890 yuan per kilogram. 
    Open interest on the Shanghai futures contract also jumped
on Monday to 516,568 lots, its highest since the start of the
year. Trading volumes reached 2.28 million lots.  
    "Since last week's Reddit discussions to buy long, funds
have flowed into the silver market," said Xu Ying, precious
metals senior analyst at Orient Securities Research.
    "In the short term, silver's rise has little to do with
fundamentals. Sentiment to go long is high, the market rally is
not over yet."
    Silver is dubbed the "poor man's gold", as it is cheaper to
buy and invest in while impacted by the same factors as gold. 
    Shares of Chinese listed silver mining companies like
Shengda Resources Co Ltd  000603.SZ  and Inner Mongolia Xingye
Mining Co Ltd  000426.SZ , rallied on Monday, while listed open
fund UBS SDIC silver futures fund  161226.SZ  closed 8.7% up. 
    Chinese social media was abuzz with silver's rally, but
warned of a possible bubble.
    "I thought it will be the victory of retail investors, but
if this continues, the market will definitely fall and retail
investors will only harm one another," said a comment on Weibo.
    

 (Reporting by Emily Chow in Shanghai, additional reporting by
Beijing newsroom, editing by Ed Osmond)
 ((emily.chow@thomsonreuters.com; +862120830020; Reuters
Messaging: emily.chow.thomsonreuters.com@reuters.net))