Is it worth it to trade silver?

Many people must think so, because after gold silver is the most traded of the precious metals. And there are many ways to trade silver, from futures and options, the ETFs and CFDs. Some people even use the physical metal, although this is far more suited to long-term investing. Trading silver has become increasingly popular thanks to the lower price of silver in comparison with gold, and also because of the greater moves typically seen on a daily basis in silver. Those looking to day trade precious metals can do far better with silver as they can take advantage of the greater volatility and price moves.

Is silver the best precious metal to trade?

Silver has an advantage over other precious metals in being priced much lower. It is also preferred by many traders because it tends to have greater price swings and stronger trends. The increasing use of silver for industrial applications also helps support the price of this precious metal. Obviously the best precious metal for any trader is the one they understand the best, but for those just getting started in precious metals trading silver can be an excellent place to begin.

What is the best strategy for trading silver?

One very successful trading strategy for silver is to take advantage of the Gold-Silver ratio. The Gold-Silver Ratio is a measure of how many ounces of silver it takes to buy an ounce of gold. It establishes the relative value between the two metals and trading strategies based on it can make money even if the price of both gold and silver rise or fall at the same time. Typically traders look for the ratio to become extremely high, which is a signal to buy silver, or extremely low, which is the signal to sell silver.

Silver Trading

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Silver Trading

Silver is one of the rarest metals on earth and is considered a high-demand commodity by many traders. The Silver trading symbol Is YI. While Silver is less rare than gold, its role affects the currency markets significantly and works mostly in tandem with gold trading prices. As it is one of the most versatile of metals, it can be used as both an industrial metal and a hard asset and plays a double role in the commodities market.

Advantages of Trading Silver

Trade Silver and other metals with competitive spreads
Leveraged trading with leverage of up to on Silver
Take your pick between manual and auto trading platforms
Express any market view and employ different trading strategies
Enjoy world-class customer service
Trade on the move from your mobile phone, tablet or web trading
Enjoy trading forex and commodities from one account, across a variety of trading platform

The Silver Market

Silver is traded in 3 main places around the globe: the New York Mercantile Exchange (NYME), the London Metal Exchange (LME) and the Chicago Board of Trade (CBOT). The Silver trading hours begin at 00:00 until 21:00 GMT, and from 22:00 to 24:00 GMT – 23 hours around the globe.

What Affects the Silver Price?

The Silver trading price is affected by many factors. Here are a few:

Power as a Natural Resource

As a natural resource, Silver has to be mined from the ground. As such, its supply is often inconsistent with demand, leading to fluctuations in its price. In recent years, Mexico was the world’s main Silver miner, with some 5,000 metric tons produced in 2014. The USA is the world’s leading consumer of Silver with about 20%, and India and China are in second place with approximately 18%.

Industrial Demand

Silver has several industrial uses; therefore, economic growth can affect Silver prices far more than it affects gold prices. Due to Silver’s physical strength, malleability and conductivity, it is used in almost any industrial field, hence increasing its industrial demand. Use of Silver is used in many sectors; more than 50% of mined Silver goes to the movie industry, used to create sensitive materials reflecting the light. Other uses are in different industries, including military – about 500 ounces of Silver is used in every tomahawk missile. Only 3% goes to the jewellery industry. Demand from any of these sectors leads to a change its price.

Silver CFD Trading

Like the many other instruments we offer for trading, Silver is not physically bought or sold, rather traded on its price, known as Contract For Difference (CFD). When trading Silver CFD, the trader doesn’t own the instrument but can benefit from the changes in its value. The contract is between the trader and the broker, and the prices are derived from the real instrument price. As Silver is not a very common commodity, not every trader can gain easy access to it, especially when the minimum amount for purchase is 100-units. Trading CFDs on Silver, rather than buying the product itself allows every trader to benefit from this commodity.

When buying or selling real Silver, people have to invest a lot of their own capital funds to get any real exposure. However, when trading CFDs one can employ the use of leverage, which decreases significantly, the amount he needs to invest. If, for some reason, a certain commodity’s price drops, people who own it are left with the physical product at a low value. However, when having a CFD position opened, all the trader needs to do is close it, thus minimising the risk he takes.

Silver Trading With AvaTrade

Trading Silver is no different than any other instrument, however, you should look for a broker with safe regulation, which guarantees your funds are safe and your account is well kept under heavy encryption. It is worth learning more about Silver, in order to increase your trading advantage. We supply education materials at the highest level, and we hope that this in conjunction with our highly regulated structure affords you peace of mind.

Silver Trading Main FAQs

Is it worth it to trade silver?
Many people must think so, because after gold silver is the most traded of the precious metals. And there are many ways to trade silver, from futures and options, the ETFs and CFDs. Some people even use the physical metal, although this is far more suited to long-term investing. Trading silver has become increasingly popular thanks to the lower price of silver in comparison with gold, and also because of the greater moves typically seen on a daily basis in silver. Those looking to day trade precious metals can do far better with silver as they can take advantage of the greater volatility and price moves.
Is silver the best precious metal to trade?
Silver has an advantage over other precious metals in being priced much lower. It is also preferred by many traders because it tends to have greater price swings and stronger trends. The increasing use of silver for industrial applications also helps support the price of this precious metal. Obviously the best precious metal for any trader is the one they understand the best, but for those just getting started in precious metals trading silver can be an excellent place to begin.
What is the best strategy for trading silver?
One very successful trading strategy for silver is to take advantage of the Gold-Silver ratio. The Gold-Silver Ratio is a measure of how many ounces of silver it takes to buy an ounce of gold. It establishes the relative value between the two metals and trading strategies based on it can make money even if the price of both gold and silver rise or fall at the same time. Typically traders look for the ratio to become extremely high, which is a signal to buy silver, or extremely low, which is the signal to sell silver.

Start trading the dynamic Silver markets with AvaTrade and enjoy the benefits of trading with a regulated, award-winning broker!