The erratic trading in shares of underdog companies like GameStop that turned markets combustible last week appears to have migrated to commodities, sending silver prices surging to an eight-year high.<\/b>
\nNEW YORK \u2014 The erratic trading in shares of underdog companies like GameStop that turned markets combustible last week appears to have migrated to commodities, sending silver prices surging to an eight-year high. Silver for March delivery jumped $2.50, or 9%, to settle at $29.42 an ounce with #silversqueeze trending on Twitter. That exuberance spread to companies that mine precious metals, especially silver. Shares of Pan American Silver surged more than 9%, First Majestic Silver rose 18.7%, Hecla Mining spiked 21.8%, and Coeur Mining soared 17.6%. Silver prices that appear to have gone haywire appear, at least in part, to be an outgrowth of the \u201cWallStreetBets\u201d forum on Reddit. An online army of Reddit traders banded together for the past week to snap up thousands of shares of GameStop, AMC and other struggling chains, stocks that have been heavily shorted (bets that the stock will fall) by a number of hedge funds who have taken huge losses as a result. But the rush into silver futures has created confusion amid the chaos, with some retail traders on Reddit calling the surge in commodity prices a \u201cfalse flag.\u201d \u201cIT\u2019S A TRAP!\u201d one Redditor warned. Some of these smaller traders believe the hedge funds that were pillaged last week are behind the surge in silver. Communications on messaging boards claim hedge funds have now become active on Reddit anonymously, attempting to drive them out of GameStop bets and into silver, but only after hedge funds had taken huge positions. If it is a trap, no one can say for sure. The number of GameStop shares that have been shorted were slashed by more than half in recent days, according to a report Monday by the analytics firm S3 Partners. The battle over GameStop, according to Morgan Stanley, may have played a part in igniting a market correction. The \u201ccorrection has arrived,\u201d wrote analyst Michael Wilson, saying that in addition to other market forces, aggressive short squeezes have \u201cled to a significant degrossing (selling off overvalued stock) by hedge funds.\u201d \u201cMarkets corrected 3-5% with many of our favored trades taking a much needed and expected hit,\u201d Wilson wrote. \u201cThis is normal in an exuberant bull market, but we don\u2019t think the correction is over until leverage is reduced further by both institutional and retail investors.\u201d<\/p>\n