Silver trading

Find out all about trading silver – including what makes it popular, some silver trading tips, and how to get started with IG.

Why is silver trading popular?

Throughout history, silver has been synonymous with currency. A British pound is called a pound because it used to be equal to a pound of silver, and in over 14 languages the words for silver and money are the exactly the same.

And despite not being as rare or as valuable as gold, its more illustrious cousin, there are a few benefits that make silver an attractive market in its own right:

  • It has a lower cost of entry than other precious metals – an ounce of silver bullion, for instance, typically costs 40-80 times less than an ounce of gold
  • It’s considered a ‘safe haven’ investment in times of economic uncertainty, as well as having a wide variety of industrial applications
  • It’s relatively volatile for a precious metal, meaning it can offer bigger returns in bull markets

Why trade silver with IG?

  • Low spreads

    Trade silver with spreads from just two points, on our platform and on MT4

  • Spot silver and futures

    Speculate on futures markets, or take a short-term view with expiry-free products

  • Risk management tools

    Take complete control over every trade with stops, limits, alerts and more

Three top tips for trading silver

1. Decide between day trading and investing

There are lots of different ways to speculate on silver’s price movement – to help you choose which is right for you, decide whether you want to invest in silver over the long term or take advantage of short-term price movements.

Explore the different benefits of CFD trading

2. Make full use of technical charts

However long you plan on holding silver for, choosing the best level to open and close your positions can help maximise profits and minimise losses. Using IG’s continuous silver charts, you can backtest your technical strategy over years of price action.

Discover our innovative charts

3. Consider silver ETFs or silver miners

As well as trading movements in the precious metal’s price, you may want to consider exposure via other means, like silver exchange-traded funds (ETFs), or shares in mining companies that specialise in silver. 

Learn more about our share CFDs 

Factors that influence the price of silver

Silver supply and demand

Like any financial asset, the price of silver is dependent on supply and demand. Silver is more abundant in supply than gold, but also has more uses in industry and beyond.

Industrial output

Silver has a lot of uses in industry, including in the production of solar panels, batteries, LED lights and photographic film. So industrial output levels can have a major effect on its price.

The price of gold

Where gold trading goes, silver tends to follow. While not an absolute rule by any means, there is clear evidence of a price correlation between the two metals.

Demand for other metals

Silver is most often extracted from the ore of other metals: copper ore, for instance, accounts for 26% of all silver mining. So if demand for copper spikes, it can lead to a silver surplus. 

The price of the dollar

Like all precious metals, silver is dollar-denominated. That makes silver an attractive investment when the price of the dollar is low, which can in turn drive up its price.

Economic uncertainty

Silver is widely viewed as having an inherent value – meaning that it stores its value in times of financial stress or political crises. From 2008-2010, for instance, silver’s price rose more than gold’s.

Silver vs. gold

Silver may be an attractive investment on its own merits, but it still always tends to be viewed in relation to gold. The comparison stretches back centuries, with silver long used around the world alongside gold as a monetary metal.

Is silver a better safe haven than gold?

Like gold, silver can be used as a ‘safe haven’ investment in times of market turbulence. But for two main reasons gold is usually viewed as the more reliable investment when economic uncertainty rises.

Firstly, silver is used far more in industry than gold – its estimated that over 50% of demand for silver comes from industry, compared to just 10-15% for gold – which makes its price far more dependent on industrial output. Secondly, silver’s price tends to be more volatile than gold’s, which can be off-putting for risk-averse investors.

The gold-silver ratio

The best way to assess silver’s value in relation to gold is by examining the gold-silver ratio: or how many ounces of silver you can buy for the same price as a single ounce of gold. Over time, there have been huge fluctuations in this ratio, from around 20 in 1970 to just below 100 in when silver hit record lows in 1991.

For the past few years, the gold-silver ratio has largely stuck between 40 and 80. Some precious metals investors, therefore, may see a ratio of 80 or higher as a good opportunity to increase their silver holdings. 

Get started trading silver

Follow these three steps to start trading silver today:

Open and fund an IG account

Choose a CFD account to trade silver on leverage.

Analyse silver’s price movement

Take advantage of our extensive range of tools and resources to plan your silver trades.

Execute your trade anywhere

Buy or sell silver or silver miners on any device, including PC, iPhone, Android and more.

Open an account now

It's free to open an account, takes less than five minutes, and there's no obligation to fund or trade.

FAQs

Where is silver traded?

Most silver commodities trading is handled via futures contracts. These contracts are traded on exchanges like the New York Mercantile Exchange (NYMEX), with each futures contract representing 5000oz of silver.

With IG, you can trade spot silver as well as futures – enabling you to take advantage of short-term price movements without buying or selling futures contracts.

What are silver’s trading hours?

Spot and futures contracts on silver can be bought and sold 23 hours a day, from 11pm to 10pm. (London time)

Can I use signals to trade silver?

Yes. The new IG Trading platform comes with free trading signals to help you identify the right time to trade a variety of markets, including silver.

Find out more about signals

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IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

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