A man wearing a protective face mask as a preventive measure against coronavirus disease (COVID-19), walks at the Deira Gold Souq in Dubai, United Arab Emirates, March 18, 2020.
Silver prices are having a run of volatility brought on by the chatter on Reddit. It's ripples are now apparent in Gold Souq. Image Credit: Reuters

Duba: The disruption caused by silver's Reddit-fueled surge has spread all the way to the souks of the Middle East. While the metal's jump to an eight-year high on Monday benefited many long-standing bulls on Wall Street, shop owners in Dubai's Gold Souq were far less euphoric.

Traders in the market - who sell plenty of silver, diamonds and platinum in addition to gold - have to pay more to source their silver jewelry and bars from wholesale dealers. That's forced them to mark up their own prices, and it's scaring customers away.

Business was already slow after the pandemic cut the number of tourists packing into the bazaar, one of the biggest traditional metals markets in the Middle East. Then came the Reddit crowd pushing up silver.

No rationale

"This is getting too crazy," said Shuhaid, a trader in the souk. "Customers are asking for the price and then canceling their orders. It's getting really terrible."

Interviews with more than 20 silver salesmen in the market painted an equally grim picture. Most said they're simply wishing the speculative craze ends soon. They got a partial reprieve on Tuesday, with silver dropping around 5 per cent to below $28 an ounce after analysts warned the rally was overdone.