Thousands of new investors bought silver bars and coins in the hope of riding the momentum caused by an army of traders on the Reddit forum.

Earlier this week the silver price shot to an eight-year high on the back of the latest private investor craze. The army of investors collaborating on Reddit attempted to bid up the price to hit hedge funds holding short positions on the metal.

The controversial practise of betting against a commodity or stock in the hope the price will fall has been under pressure in recent weeks. It started with American companies Gamestop, Nokia and Blackberry, but has quickly moved on to other areas.

Silver producer The Royal Mint said it had been inundated with trades to buy the precious metal. Over the past 10 days, around 2,000 new investors bought silver for the first time.

Over the weekend, it said demand for its silver assets was 14 times higher than normal as investors flocked towards physical bars and coins as well as digital versions of the metal.

In America, the surge in interest caused retail sites to become overwhelmed, with many of the major dealers unable to process orders, according to Bloomberg.

As well as physical silver, traders targeted exchange-traded funds that deal in the metal, pumping a record $1bn (£730m) into the iShares Silver Trust on Friday. By doing so, the $16.5bn portfolio, which holds physical silver, was forced to buy up more of the metal, increasing the price.

Ned Naylor-Leyland, manager of the $1bn Merian Gold & Silver fund, suggested the amount invested in the iShares Silver Trust equated to 400 million ounces, which could cause logistical issues for these "tracker" funds, many of which have to hold physical bars in warehouses.

Armchair investors pushed the price of silver above $30 an ounce on Monday – its highest level since 2013, but on Tuesday the price fell back to $26.9 per ounce, leaving those that bought in at the top with a potential loss of 10pc.

However, the long-term prospects for the metal are promising. Unlike gold, silver is used for many industrial processes, including the roll out of 5G networks, electric vehicles and solar energy.

Alongside the surge in investor buying, around 500 million ounces per year would be needed for industrial projects, said Mr Naylor-Leyland. During the pandemic, silver producers have only mined 750 million ounces, suggesting there could be a shortage in the coming years.