NEW YORK: Silver prices rose around 7% on Thursday as the dollar weakened, making the metal cheaper for buyers outside the United States.

Some traders were also moving to cover short positions as rumours rippled through the market about a GameStop-style squeeze driven by retail investors.

Calls to drive silver prices higher by buying shares in silver miners and exchange traded funds (ETF) were circulating on social media such as Reddit and Twitter.

Trading of Blackrock’s iShares Silver Trust surged, while shares in Canadian miner First Majestic Silver leaped more than 30%.

Spot prices shot as high as $26.95 an ounce after US markets opened, up almost 7%, before slipping back to $25.93 an ounce by 01:43 p.m. EST (1843 GMT).

“After watching GameStop and other shorts getting blasted, rumours that silver could be targeted has traders preemptively covering shorts just in case,” said Tai Wong, a trader at investment bank BMO in New York.

Other analysts said the social media action was not impacting prices.

The silver market is much larger and more liquid than shares of companies such as GameStop, whose shares have ricocheted madly this week. Because of this, efforts of retail investors will have little effect, predicted Ross Norman, an independent analyst.

The dollar also fell as US markets opened, giving a boost to dollar-priced precious metals.

Data showed the US economy contracted in 2020 at its sharpest pace since World War Two, encouraging investment in assets such as silver and gold, traditionally seen as safe stores of wealth.

Spot gold spiked as much as 1.1% higher as US trading began, before slipping to $1,840.81 an ounce, near their lowest since Jan. 18.

US gold futures settled 0.4% lower to $1,837.90.

Meanwhile, platinum edged up 0.5% to $1,070.31. Palladium rose 1% to $2,327.98.