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Asian shares rally as retail crowd catch silver bug

Stock Markets Jan 31, 2021 11:40PM ET
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© Reuters. FILE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes in Shanghai
 
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By Wayne Cole

SYDNEY (Reuters) - Asian shares rallied on Monday and U.S. stock futures recouped early losses as newly empowered retail investors turned their attention to precious metals, promising a respite to some hard-hit hedge funds.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4% after four straight sessions of losses.

Japan's Nikkei added 1.2%, after shedding almost 2% on Friday, while Chinese blue chips gained 0.5% as the country's central bank injected more cash into money markets.

Futures for the S&P 500 edged up 0.3%, having been down as much as 1% in early action, while NASDAQ futures firmed 0.1%. EUROSTOXX 50 futures added 0.6% and FTSE futures 0.2%.

Dealers noted a shift in the headline-grabbing battle between retail investors and Wall Street that led hedge funds last week to trade the most stock in a decade amid wild swings in GameStop Corp (NYSE:GME).

Talk now was that silver was the new target for the retail crowd, as the metal jumped 6% to a six-month high, possibly limiting the need for distressed selling by stock funds.

Analysts cautioned this entertaining episode was really a sideshow compared with signs of a loss of economic momentum in the United States and Europe as coronavirus lockdowns bite.

Indeed, two surveys from China showed factory activity slowed in January as restrictions took a toll in some regions.

Neither was the news on vaccine rollouts positive, especially given doubts about whether they will work on new COVID strains.

"It is these considerations, not what is happening to a video game retailer day to day, that has weighed on risk assets," said John Briggs, global head of strategy at NatWest Markets. "So much of the market's valuations, risk in particular, is premised on the fact we can see a light at the end of the COVID tunnel."

Doubts have also emerged about the future of President Joe Biden's $1.9 trillion relief package, with 10 Republican senators urging a $600 billion plan.

The jitters in stocks caused only a brief ripple in bonds, with Treasury yields actually rising late last week, perhaps a refection of the tidal wave of borrowing underway.

A record $1.11 trillion of gross Treasury issuance is slated for this quarter, up from $685 billion the same time last year.

On Monday, U.S. 10-year yields had nudged up to 1.08% and nearer the recent 10-month top of 1.187%.

Higher yields combined with the more cautious market mood have seen the safe-haven dollar steady above its recent lows. The dollar index stood at 90.535, having bounced from a trough of 89.206 hit early in January.

The euro idled at $1.2129, well off its recent peak at $1.2349, while the dollar held firm at 104.70 yen.

Gold followed silver higher to $1,862 an ounce, but has repeatedly stalled at resistance around $1,875. [GOL/]

Oil also tracked the gains in other commodities, with U.S. crude rising 21 cents to $52.42 a barrel. Brent crude futures gained 33 cents to $55.37. [O/R]

Asian shares rally as retail crowd catch silver bug
 

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Comments (31)
Art Fire
Art Fire Feb 01, 2021 1:01AM ET
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Over 1 trillion market cap. No chance of squeeze... retail doesnt have that kind of money. Invest because you want not because someone said it will squeeze
Papai Mil
Papai Mil Feb 01, 2021 1:01AM ET
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Over 1 trillion market cap.... of derivatives and short vol strategies...
Tobias Mueller
Tobias Mueller Feb 01, 2021 1:01AM ET
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But... but... I invested $500 into shilver! Not enuff?!
TL Chan
TL Chan Feb 01, 2021 12:57AM ET
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Don't you know the annual production of Silver, the market is too big to crack ! It is different from GME case which the total shares cannot be changed in short period of time! Silver case is more complicated, Givernment and Comex has lot more ways to tackle it!
TL Chan
TL Chan Feb 01, 2021 12:48AM ET
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No one gave you sound reason why targetting Silver will work, everyone just looking at price action and flood it! How clever that could be ? Why no one asking why this will work?
Enron Mask
Enron Mask Feb 01, 2021 12:45AM ET
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Target is COMEX manipulation on silver, selling contracts without full covarage. Once they will admit they dont have what they promise price will explode!
TL Chan
TL Chan Feb 01, 2021 12:44AM ET
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Reddit group lose the second round, it lose momentum ! WST will crumble it with next move when the group losing the cohesive force!
TL Chan
TL Chan Feb 01, 2021 12:42AM ET
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You don't assume WST sitting there doing nothing! This guiding to target Silver could be a diverting strategy based on The Art of War!
TL Chan
TL Chan Feb 01, 2021 12:36AM ET
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Who guided the Reddit sub to target Silver, check out that guy see if he is the infiltration from WST !
TL Chan
TL Chan Feb 01, 2021 12:26AM ET
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the shrinking stimulus and covid variant would weight on the silver! I don't think you can flood silver for long, the late comers are at low probability trade! It will end up badly!
TL Chan
TL Chan Feb 01, 2021 12:20AM ET
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ok, both Gold and Silver is rising! let see how fat they go !
TL Chan
TL Chan Feb 01, 2021 12:11AM ET
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It will drop again tomorrow !
 
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