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Your guide to trading silver

Learn how to trade silver and find out everything you need to know about the top-traded precious metal commodity.
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Why is the silver market important to traders?

A top-traded white metal commodity, silver has several characteristics: it is pliable, malleable and lustrous. Silver is also a good conductor of electricity and a bacteria killer, which makes it a highly valuable metal in a wide range of industries, including energy, medicine, electronics and jewelry.

For centuries people have used silver as a store of value and a popular investment. Together with gold and platinum, silver is rare and belongs to the category of precious metals.

Silver mining began 5,000 years ago in Asia. Later, the Greek Empire started using it as a currency, and in the time of the Roman Empire, silver proved to be an essential trading commodity.

Silver1

Silver market trading hours

CME Globex provides electronic trading for 24 hours/6 days a week:

  • Sunday to Friday, 6:00 p.m. – 5. p.m. with a 60-minute break each day.

If you choose to trade CFDs, you can follow the silver prices live in US dollars with the comprehensive silver price chart with Capital.com:

  • Monday to Thursday, 00:00 – 21:00 and 22.05 – 00.00
  • Friday, 00.00 – 21.00
  • Sunday, 22.05 – 00.00

How to trade Silver?

There are several major reasons to trade silver, however, the most common are the following:
 

  • Diversification

The presence of the Silver commodity in an equity-only portfolio can lower the volatility, due to the absence of a correlation between the metal and other asset classes.

  • Safe Haven

Commodities can serve as a safe haven in the times of global economic uncertainty and market turbulence, because they can retain their value.

  • Inflation Hedging

Commodities’ intrinsic value is independent from currencies. They will often hold their value, even if a currency falls during the period of inflation.

  • Speculation on silver prices

Commodities may be highly volatile, experiencing wild price swings. Trading silver CFDs is one way to try and  profit from drastic silver price fluctuations.

Trading silver requires some consideration, due to the market’s occasional high volatility and a wide choice of available instruments, from silver derivatives, such as futures and CFDs, to silver mining company stocks.

Trading Silver can be extremely volatile resulting in a high degree of risk. The chance of making large profits goes hand in hand with the risk of large losses.

How to trade Silver CFDs?

One of the easiest and most popular ways to trade silver is with CFDs.

A contract for difference (CFD) is a type of contract between a trader and a broker in order to try and profit from the price difference between opening and closing the trade.

Investing in silver CFDs saves you the inconvenience of paying for silver storage. in addition, CFDs give you the opportunity to trade Silver in both directions. No matter whether you have a positive or negative view of the silver price forecast and predictions, you can try to profit from either the upwards or downward future price movement.

Moreover, trading silver through CFDs is often commission-free, with brokers making a small profit from the spread - and traders trying to profit from the overall change in price.

Additionally, the 10% margin offered by Capital.com means that you have to deposit only 10% of the value of the trade you want to open, and the rest is covered by your CFD provider. For example, if you want to place a trade for $1,000 worth of Silver CFDs and your broker requires 10% margin, you will need only $100 as the initial capital to open the trade.

Why trade silver CFDs with Capital.com?

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative SmartFeed offers a range of materials to put him or her back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This will help you to refine your approach when you trade silver.

Trading on margin: Thanks to margin trading, Capital.com provides you with the opportunity to trade silver CFDs and other top-traded commodities, even with a limited amount of funds in your account.

Trading the difference: By trading silver CFDs, you don’t buy the underlying asset itself. You only speculate on the rise or fall of the silver price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and make forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Capital.com puts a special emphasis on safety. Licensed by CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows clients to withdraw money 24/7 and keeps traders’ funds in segregated bank accounts.

Top silver market businesses

Buying  shares of mining and exploration companies is another popular, albeit indirect way of trading silver. In times when silver is rising, investors in silver stocks can profit. A list of some of the key players in the silver market includes the following businesses:

  • Wheaton Precious Metals

Canadian silver and gold mining and streaming company. Wheaton’s shares are listed on the New York Stock Exchange (NYSE).

  • Pan American Silver Corp.

Canadian company engaged in exploration, extraction, processing and refining of silver. The company’s shares are listed on the New York Stock Exchange (NYSE).

  • SSR Mining

Canadian company that acquires, explores, develops and operates precious metal properties in the Americas. The company’s shares are listed on the New York Stock Exchange (NYSE).

  • First Majestic Silver Corp

The company specialises in silver exploration, production and development. In addition, it acquires existing silver mines. Its shares are listed on the Toronto Stock Exchange (TSE).

  • Great Panther Silver Limited

Great Panther is a silver miner, based in Mexico. The company’s shares are listed on the Toronto Stock Exchange (TSE) and on the New York Stock Exchange (NYSE).

  • Hecla Mining

The oldest gold and silver mining company in North America. Hecla shares are listed on the NYSE.

Silver price history

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Considered as one of the oldest currencies in the world, Silver has always been rather volatile. It is subject to both investment and industrial demand, which significantly drives its price.

The major Silver price drivers are:

  • Industrial demand

Silver has diverse technological applications and is widely used in automotive, electronics and healthcare industries.

  • Other demand

Silver is also used in silverware, jewellery and photography.

  • The price of gold

Historically, Silver and Gold have experienced a strong positive correlation. Silver tends to follow the direction of the Gold price.

  • Inflation and US dollar

During periods of inflation, traders often consider Silver as a trustworthy store of value. When the USD weakens, Silver prices tend to rise.

In terms of historical price action, silver hit its all-time high of $49.45 per oz in January 1980. The commodity’s record low of $3.55 occurred in February 1991.

The silver highest average annual price was recorded in 2011, when it hit $35.12 coming from a very strong investment demand for silver. It doubled the average silver price of $14.67 in 2009.

The latest silver price per ounce (oz) as of 16 October 2018 was $14.78.

To follow the most recent ups and downs of the silver price, check out our live silver price chart.

FAQ

Despite a very long history of silver mining, its production and reserves are relatively limited. According to some recent estimates, the total quantity of silver mined throughout the history is 1.5 million tonnes, and the world’s silver reserves are 29,665 tonnes. Silver is rarely found as a separate element. Instead, it is usually found as a byproduct of mining gold, copper or zinc.

Meanwhile, the top 10 countries, producing silver, include the following:

Rank

Country

Annual silver production in millions of ounces

#1

Mexico

186.2

#2

Peru

147.7

#3

China

112.4

#4

Chile

48.1

#5

Russia

46.6

#6

Australia

43.6

#7

Bolivia

43.5

#8

Poland

38.5

#9

USA

35.4

#10

Argentina

30.0

The officially reported silver reserves, held by each country are the following:

Rank

Country

Amount of silver in tonnes

#1

Peru

120

#2

Australia

89

#3

Poland

85

#4

Chile

77

#5

China

39

Silver is a multipurpose metal with a bunch of unique characteristics, which makes it popular among various industries. However, the list of major applications includes the following:

1) Jewellery

Silver is lustrous, beautiful and workable. Therefore, it is widely used for  bracelets, earrings, rings and necklaces. The silver, which is usually used for jewellery is called sterling silver, containing 92,5% silver and 7.5%  copper.

2) Technology
Silver is also widely used in:

  • Electronics
  • Solar cells
  • Catalysts
  • Brazing and soldering
  • Ball bearings
  • Medicine

3) Private investments

Individual investors and investment funds will often buy silver to diversify their portfolios and hedge them against possible losses from inflation.