Citi’s playbook on silver as Reddit rally fizzles

Bars of silver bullion sit in the precious metals vault at Grupo Mexico SAB’s La Caridad smelter facility in Sonora, Mexico.

Susana Gonzalez | Bloomberg | Getty Images

Silver soared to an eight-year high this week, fueled by a Reddit trading frenzy that saw retail investors on a popular forum talk up the precious metal.

The rally may not be over and silver could test new highs, says Citi analyst Tom Fitzpatrick.

On Monday, silver futures rose 8% to $29.06 an ounce — the largest one-day rise in silver on NYMEX since at least 2013.

Spot silver last traded in afternoon trading in Asia at $27.61 per ounce, falling more than 4% after seeing large gains a day earlier.

Fitzpatrick, who is global head of CitiFXTechnicals, outlines three potential cases for silver. The most bearish scenario represents gains of more than 100%, if gold prices soar to $2,500 per ounce.