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According to HSBC Chief Precious Metals Analyst Jim Steel, silver’s recent retail-driven rally to eight-year highs was a significant event.

“The metal is most vulnerable to accelerated retail demand and often subject to sharp moves,” Steel told S&P Global Market Intelligence. 

The metal rallied 20% between last Thursday and early Monday, hitting an eight-year high of $30.03, as fears of crowd buying-led short squeeze translated into a robust physical demand. 

However, the much-anticipated short squeeze remained elusive, with hedge funds holding net long positions since 2019. As such, prices fell by over 8% to $26.69 on Tuesday and have struggled to bounce back ever since. 

At press time, silver is trading largely unchanged on the day near $26.27 per ounce, having hit a low of $25.90 on Thursday.