Silver broke above $30 US an ounce for the first time since 2013 on Monday, the latest asset to see a pop in a volatile few weeks on markets.
Colin Cieszynski, chief market strategist with SIA Wealth Management in Toronto, said silver has apparently become the next asset to get caught up in the GameStop frenzy.
“The most significant move this morning has been in silver, which was a trending topic in the media and on Reddit over the weekend with a lot of chatter (both for and against) that it could be the next market to become active in the wake of GameStop’s big move last week,” he said.
Spot silver leapt more than 11 per cent in London to $30.03 an ounce and was on track for its biggest one-day rise since 2008, taking gains to about 19 per cent since last Wednesday.
The jump set off a rally in silver-mining stocks from Sydney to London.
The action in silver, following thousands of Reddit posts and hundreds of YouTube videos suggests that a rise in the physical price could hurt large investors with bearish bets, also marks a foray into a much bigger and more liquid market than individual stocks.
Analysts who monitor silver markets say there is more to the story than small investors rushing in.
“The asset is traded by a variety of institutional players and it is very likely that those parties have joined the move to push the metal higher,” wrote Boris Schlossberg of BK Asset Management.
On Twitter, #silversqueeze was trending as investors turned their attention to silver, but some members of the WallStreetBets forum on Reddit insisted this was not their latest strategy. (Dado Ruvic/Reuters)
“I would look at the silver rally the same way as I would the GameStop saga — from the point of view of market stability, for now it’s not an immediate concern, but if we see sharp moves, we could see some deleveraging in markets,” said Antoine Bouvet, a rates strategist at ING.
“This reducing of risk through deleveraging could potentially boost demand for bonds if it is causing excess volatility.”
In the first signs of deleveraging, Goldman Sachs said the amount of position-covering last week by U.S. hedge funds, buying and selling, was the highest since the financial crisis more than a decade ago.
Nevertheless, their market exposure to stocks remains near record levels, the investment bank warned.
Rise of new trading platforms
The rush to silver and GameStop-like stocks has been testing limitations in newer trading platforms and processing venues, frustrating retail traders who are unable to feed their hunger to buy and sell more frequently.
The feverish silver-buying has hit a glitch, with large U.S. broker Apmex warning of processing delays while it secures more bullion. The Money Metals online exchange suspended trade until mid-morning Monday.
Trading volumes in small miners’ stocks in Australia were unprecedented and jumps in some exploration firms, which do not actually produce silver, topped 90 per cent.
Similar hiccups were seen in equities last week. GameStop, AMC and a few other volatile stocks saw temporary buying restrictions in trading apps like Robinhood, as frenzied buying led to trading apps putting on curbs.
“The Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyze something of a short squeeze in the silver market,” said Kyle Rodda, an analyst at brokerage IG Markets in Melbourne.
“This is their big, bold Moby Dick moment.”
Stock in video game retailer GameStop saw huge increases last week as a cadre of retail investors mobilized to buy it up. (Carlo Allegri/Reuters)
Another ‘short squeeze’
The popularity of dabbling in stock markets has grown during the COVID-19 pandemic as volatility, stimulus checks and lockdowns have driven account openings and investment.
The craze hit fever pitch last week when the GameStop pile-on resulted in a “short squeeze,” turning price gains stratospheric as hedge funds with bets against the stock desperately bought it at high prices to close their positions.
Now it is silver’s turn and once again the scale of buying is catching the professionals by surprise.
Online discussions turned to silver late last week as Reddit posts suggested higher prices could hurt banks with large short positions, and that buying easy-to-access exchange-traded silver funds could quickly ramp up the metal’s value.
Retail traders poured a record $39.1 million Cdn into Australian ETF Securities’ Physical Silver fund by the afternoon. A silver ETF in Japan surged 11 per cent.
So far, the Redditors are rolling on. Several of the renegade traders are millionaires on paper and their hedge fund adversaries are nursing their wounds. Melvin Capital, which bet against GameStop, lost 53 per cent on its portfolio in January.
The trading app Robinhood has exploded in popularity this year by offering free trading, fuelling a boom in retail investor activity. (Brendan McDermid/Reuters)
Robinhood, the Redditors’ main broker, has also backed down and lifted some of the buying restrictions it imposed last week, although limits remain on eight companies, including GameStop, AMC Entertainment and BlackBerry.
However, with regulators circling both Robinhood and the Redditors’ forums, the battle is far from over.
“I’ll tell you one thing, [I] absolute guarantee this ends in tears,” said Michael McCarthy, chief market strategist at CMC Markets (Australia). “I just don’t know when.”
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
