Why the Silver Trade Shouldn’t Be Lumped In With GameStop Stock and AMC

Silver soared, then dropped. Whatever happens now, the metal’s price movements will look nothing like what happened with the stocks that faced a spectacular short squeeze and are now falling.

Monday, the price of actual silver rose as much as 9% to $29.52 per ounce. “Retail traders who drove the short squeezes in stocks like GME last week were banding together to try and trigger a squeeze in silver,” wrote Tom Essaye, founder of Seven’s Report Research, in a note.

It all revolves around the practice of short selling, where people borrow a stock and sell it, hoping the price will fall, making it possible to buy shares at a lower price and return them. A short squeeze happens when the price of the stock rises, rather than falls, forcing short sellers to buy. If a lot of the stock available for trading has been sold short, there can be a scramble to buy that triggers spectacular price gains.

That is what happened with GameStop (ticker: GME) last month. Other stocks that had been aggressively sold short surged as well.

But the iShares Silver Trust (SLV), after rising 11% to $27.76 a share Monday, is now down 11% from that level. There are key differences between companies like GameStop and AMC Entertainment (AMC) and silver.

First off, GameStop rose as much as 1,800% in a few weeks in January. AMC rose as much as 890% in roughly the same period. The iShares Silver exchange-traded fund, which buys futures contracts linked to the direction of the metal’s price, rose to roughly its all-time high of $27, set in August, and failed to break past it.

With the price down Tuesday, fundamentals, rather than the possibility of a short squeeze, are returning to the fore. While silver is an asset that can take part in a “reflation rally,” or one that occurs when economic stimulus jolts an economy out of recession and spurs inflation, that possibility doesn’t seem to have been enough to send the silver ETF to a new high.

Importantly, options trading was an important factor in the gains for GameStop and AMC. Retail traders were buying calls, or the right to buy shares at a specified strike price on a later date. The hope is that an option’s strike price will be lower than the stock’s price when that day comes, making it possible to buy at the strike price and make a profit by immediately selling on the open market.

That possibility forces the brokers who wrote the options contracts to hedge by buying the shares. It adds to demand for a stock and can contribute to a short squeeze, as appears to have happened with GameStop and AMC. Retail traders posting on Reddit were able to move the stock without much capital because they could buy call options at a far lower price per underlying share than the cost of the actual stock.

For silver, the overarching theme is that retail traders can’t summon up the large pool of capital needed to create huge demand for silver.

Traders aren’t buying calls on silver right now, Andrew Smith, chief investment strategist at Delos Capital Advisors, told Barron’s, citing the activity he saw Tuesday. That’s partly because buying calls on commodity ETFs, which reflect a blended forward expected price—based on the prices forecast for several different dates—is a complex process.

Buying silver outright, which is what retail traders did, requires much more money. There are no call options and no need for brokers to hedge against them.

“Squeezing the market isn’t likely” from here, wrote Jeff Currie, global head of commodities research at Goldman Sachs, in a note. In order for the WallStreetBets crowd to send silver prices up the 700% they rose in 1980, when the wealthy Hunt brothers gobbled up almost one-third of the global supply, they would have to own 4,600 tons of silver each.

Silver could certainly charge ahead, just not so fast so soon.

A new investment fund targeting celebrity-founded consumer brands has secured US$40 million in commitments and is rapidly approaching its US$50 million fundraising target, signalling growing investor appetite for alternative opportunities beyond traditional asset classes.

The Global Talent Fund, which has a maximum raise of US$100 million, focuses on building and investing in consumer businesses alongside celebrities, athletes, and influential personalities who play an active role as co-founders rather than simply endorsing products.

The strategy is based on the belief that changes in consumer behaviour, particularly the rise of social media and digital engagement, have fundamentally altered how brands are built and scaled.

GTF founding partner Jeremy Hunt, who is helping lead the fund’s strategy, said consumers increasingly feel connected to personalities they follow online and are more willing to support products developed by those individuals.

“Consumers are searching for content to engage with, and when a celebrity they like or follow takes them on the journey of creating a product or brand, they genuinely feel part of that process,” he said.

The fund is targeting high-growth consumer sectors including wellness, hydration, beauty and recovery, areas Hunt believes continue to benefit from strong global demand and ongoing innovation.

Rather than backing celebrity endorsement deals, the fund is seeking businesses where talent is deeply involved in product development, brand creation and long-term growth.

According to Hunt, authenticity remains one of the biggest differentiators between successful celebrity-backed brands and those that fail.

“The consumer can see clearly if someone is simply being paid to promote a product,” he said. “The winners are typically the brands where the celebrity has genuinely helped build the business from the ground up.”

The model has attracted support from several prominent Australian investors and business families, reflecting broader interest in alternative investments with global growth potential.

Hunt said consumer brands offered a level of tangibility that many investors found appealing.

“Consumer brands are what we touch, feel, smell and taste every day,” he said. “Our investors understand the growth potential in the model, but they also want to be part of the journey.”

The fund’s rapid progress towards its fundraising target comes amid growing recognition that celebrity influence, when combined with strong commercial execution and scalable business models, can create significant enterprise value.

With several high-profile celebrity-founded businesses generating billion-dollar exits in recent years, supporters of the strategy believe the opportunity remains in its early stages.

Why the Silver Trade Shouldn’t Be Lumped In With GameStop Stock and AMC

With US$40 million already committed, the Global Talent Fund is attracting investor attention with a strategy focused on building globally scalable consumer brands alongside high-profile talent.