• Global stocks jumped on Monday as the retail investor army turned a new darling asset: silver.
  • The world's largest silver-backed ETF posted a record $1 billion in inflows as of Friday, the FT reported.
  • Silver surfers sent London's benchmark index and UK mining stocks higher on the new short-squeeze.
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Global shares rose on Monday as retail investors shifted focus to the silver market, showing that the Reddit frenzy has spread from stocks and cryptocurrencies to precious metals.

Steinhoff - which also caught the attention of these investors - jumped another 5% on Monday morning after a 60% rally last week.

READ | Is Steinhoff the new GameStop?

Silver jumped almost 12% on Monday, from just below $25 to over $30, its highest since last August, as the world's largest silver-backed ETF, the i-Shares Silver Trust, posted a record $1 billion in inflows as of Friday, according to the Financial Times.

Anglo American, which mines silver among other metals, saw its share price jump almost 3% on Monday morning. Glencore rose almost 2%,

"While it is far more difficult to move this market compared to smaller stocks like GameStop, last week's events showed that the impact of the retail frenzy should not be underestimated," said Milan Cutkovic, market analyst at AxiCorp.

The impact of the r/wallstreetbets movement caused immense volatility in markets last week, making short-sellers anticipate further explosion in nostalgia stocks. Volatility was driven by market positioning rather than worries over growth, according to Mark Haefele, chief investment officer, UBS Global Wealth Management.

READ | Could a Reddit war come to the JSE?

"There is little doubt that huge central bank liquidity and government stimulus checks in the hands of the underemployed/furloughed (through no fault of their own) retail investors will be a big part of this bubble story," said Jim Reid, a managing director of cross-asset research at Deutsche Bank. 

Silver bulls began to impact prices elsewhere, sending London's benchmark index and mining stocks higher as a result.

The JSE's all share index was up a percent, while the S&P 500Dow Jones, and Nasdaq rose between 0.8% and 1%, suggesting a higher open for US market indices later in the day.

The UK's FTSE 100 rose 0.8%, the Euro Stoxx 50 rose 1.3%, and Germany's DAX rose 1.4%. 

However, Connor Campbell, a financial analyst at SpreadEx noted there is speculation that Reddit isn't necessarily behind the latest move.

"Though there are pro-silver posts on WallStreetBets, the 'top post' on the subject is against the trade, claiming that by 'going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME'," he said. "The same poster also stated that the short squeeze was 'a hedge-fund co-ordinated attack so they can keep fighting the $GME fight'."

Elsewhere in Asia, China posted a drop in a key business activity index as the resurgence of coronavirus impacted overall sentiment. The lower Purchasing Managers Index suggests the momentum has slowed for now, although the pan-Asian recovery retains its upward trajectory, said Jeffrey Halley, a senior market analyst at OANDA.

China's Shanghai Composite rose 0.6%, Japan's Nikkei rose 1.5%, and Hong Kong's Hang Seng rose 2%.

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