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Silver Miners Hecla, Wheaton Surge on Retail Investor Demand for Metal

Hecla, Pan American, Wheaton and other precious-metals companies soar as retail investors drive up silver prices.

Shares of Hecla Mining  (HL) - Get Hecla Mining Company Report, Pan American Silver  (PAAS) - Get Pan American Silver Corp. Report, Wheaton Precious Metals  (WPM) - Get Wheaton Precious Metals Corp Report and other minerals companies were surging on Monday as retail investors drove silver prices to their highest level since 2013.

Shares of Hecla at last check were up 35%, Pan American Silver was up 14%, and Wheaton Precious Metals was up 6.8%.

The weekend silver buying binge reportedly overwhelmed online sellers of silver coins and bars. See the hashtag #silvershortsqueeze.

"I am going to get the change out of my couch and start buying anything #Silver #silvershortsqueeze," one commenter said on Twitter. "Wow, silver short squeeze has its own hashtag."

"This is just the beginning," another responded.

The surge in silver prices was being driven by investors on messaging platforms such as Reddit's WallStreetBets. 

Last week these investors had focused on videogame retailer GameStop  (GME) - Get GameStop Corp. Class A Report, theater chain AMC Entertainment  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report, security-tech provider BlackBerry  (BB) - Get BlackBerry Limited Report and other heavily shorted stocks. All climbed sharply last week. 

Short sales are bets that a stock's price will decline.

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“So far, it is not exactly the GameStop anomaly, but it is a hint that the retail traders who just discovered the strength of their unity are out there, looking for new targets – and apparently bigger ones,”  Ipek Ozkardeskaya, senior analyst at Swissquote, told Bloomberg.

RBC analyst Tyler Broda said the silver-price move has no “normal” reasons that could justify this price action other than retail positioning.

"Google search trends show a substantial pickup in interest since last Thursday, and in our view the price action is only likely to beget more interest in the short term,” the analyst said.

Other minerals companies, such as Coeur Mining  (CDE) - Get Coeur Mining, Inc. Report, Buenaventura Mining  (BVN) - Get Compania de Minas Buenaventura SAA Sponsored ADR Report and First Majestic Silver  (AG) - Get First Majestic Silver Corp. Report were also climbing.

The frenzy in GameStop and other heavily shorted stocks has quickly become a cultural phenomenon. Many observers see the activity as a demonstration of small investors fighting back against the Wall Street Goliath.

Last week, Sen. Sherrod Brown (D-Ohio), the incoming chairman of the Senate Banking Committee, said he’d hold a hearing on the “current state of the stock market." 

And the Securities and Exchange Commission on Friday said it was "closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. 

"Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence."

GameStop shares were off 10% to $290 at last check.