Silver

Silver has properties that set it apart from most other commodities and can make for profitable trades in the right circumstances. Silver trading is also one of the most widely speculated upon commodities among UK investors, meaning there is a wide range of brokers and platforms to choose between. This guide to trading silver online unpacks live price charts and graphs, investing tips and ideas, and top strategies. Our experts have also reviewed and ranked the best silver brokers in 2024.

Silver Trading – The Basics

Silver is one of the four key precious metals that you can trade, alongside gold, palladium and platinum. Similar to gold, both precious metals are frequently used in manufacturing jewellery and industrial goods, and both have historically been minted as currency and used as a store of value.

Today, most online silver trading is done through futures, options, ETFs, as well as on the spot market and through shares in companies with an interest in the metal.

A range of silver brokers are available that provide access to these financial products. Whichever you choose, you will need an intuitive trading platform with a good range of indicators and tools for reading charts, and you will need a reliable strategy to implement. We unpack strategy tips and explain how to compare silver brokers in more detail further below.

Importantly, successful intraday traders and longer term investors keep a close eye on silver’s price – particularly relative to the US dollar (XAG/USD), as well as market trends and factors affecting the price. Keeping up to date with relevant news is one way to do this, another way is to use signals and other apps to keep your edge on the market. This makes a good trading platform, such as TradingView or MetaQuotes MetaTrader 4 or MetaTrader 5, important for reading silver charts.

Silver Price Chart

How Silver Trading Works

There are several ways for investors to gain exposure to silver trading markets:

Spot Markets

Traders buy and sell silver on spot markets to make a profit. Current silver spot trading prices are defined as the price a buyer is willing to pay per ounce of the metal, with one unit equalling one ounce. Trades are usually mid-to long-term and require larger amounts of capital investment to turn a significant profit.

Forex

Silver is offered by forex brokers in currency pairs, with the code XAG. Besides US dollars (XAG/USD), silver is commonly paired with British pounds sterling (XAG/GBP) and euros (XAG/EUR), but some trading platforms will offer it with a wider range of pairs.

UK traders often use derivatives such as CFDs (contracts for difference) and spread betting to speculate on silver price movements.

Silver Futures

In a silver future contract, the contract buyer agrees to buy the asset at an agreed price at a specified time in the future. When the contract expires, the buyer may need to take physical possession of the silver – unless they sell on the contract before expiry or roll over the contract.

Silver futures often require a significant amount of starting capital to invest, and are generally not well-suited to short-term trading, though there are some ways to profit from short-term futures trading.

Silver Options

Options contracts work in a similar way to futures, but in this case, the contract buyer pays a premium that allows them to opt out of the trade if the contract is not in the money at expiry.

ETFs

There are many exchange-traded funds that either directly invest in silver or have exposure to silver among a range of other precious metals or related investments.

Investors often choose silver ETFs as a way to diversify their portfolio or for hedging. However, some brokers also allow traders to use silver ETFs as an underlying asset in derivate trades, such as CFDs.

CFDs & Spread Betting

These instruments are popular among retail traders as they allow speculation on assets including silver without needing to own the underlying asset.

CFDs are derivative contracts in which the trader and counterparty agree that one side will pay the other the difference between the asset’s price at the opening and closing of the contract. Since CFD trades can be leveraged, significant profits can be earned from relatively small price movements in a short timeframe, making them a good choice for short-term day or intraday silver trading.

As with CFDs, spread betting involves taking a bet on the direction the asset’s price will move, and is available from many forex and other trading brokers.

Binary Options

Binary options are a straightforward bet on whether the price of an asset like silver will rise or fall, with predetermined levels of potential profit and loss.

Many retail traders favour binary options for their simplicity and fixed risk, and though silver is not the most frequently traded asset, some brokers do include the precious metal on their rosters.

Why Trade Silver?

Like gold, silver has several characteristics that make it an attractive commodity for traders. For a start, silver is considered a ‘safe harbour’ asset by many, meaning that it will often perform well during periods of general market downturn as the money flows to it from riskier assets. This in itself can be the basis of profitable bets on silver for the canny trader.

Moreover, traders who are clued into market events affecting industrial production, mining and commodities markets can use their knowledge to assert an edge and make profitable silver trades.

Finally, while there are many similarities with gold, silver also tends to be more volatile. This can make it a more difficult prospect for less experienced investors, but successful traders can take advantage of the volatility.

What Moves Silver Prices?

Silver trading prices are determined by a range of factors and it can be complicated to predict the direction the price will move. As a rule, silver prices will tend to rise during periods of market turmoil as investors seek a haven for their capital, but numerous factors can move the dial:

• Supply and Demand – Like any asset, silver prices will rise when the market perceives an increase in demand and fall if there is a significant increase in supply. News events that disrupt the mining and supply chain of silver are likely to cause price spikes.
• Inflation – Periods of high inflation can quickly erode the value of currencies, and silver once again is a safe haven to wait it out. High inflation is therefore likely to cause an increase in silver prices.
• Technology – Silver is essential for a wide range of industrial and manufacturing uses thanks to its unique properties, and this can drive the metal’s market price. The announcement of new technology that uses silver in production can cause prices to rise. Conversely, new technology that allows another material to take silver’s place in production will lower demand.
• Strength of the Dollar – Like gold, the price of silver is considered to have an inverse relationship with USD. When the dollar rises, silver usually falls, and vice versa.
• Gold–Silver Ratio – Historically, gold and silver prices have risen at the same time. However, the prices of the respective metals do not move hand in hand, and the gap in value will often widen or contract for various reasons. This leads to interesting opportunities for active traders who aim to increase their stock of the metals through clever trades based on the Gold–Silver ratio.

Comparing Silver Brokers

Choosing the right silver trading broker is one of the most important steps for a budding investor. You should look for brokerages that have the financial vehicles you want to trade, but also pay close attention to the broker’s reputation by reading online reviews and checking that it is overseen by a reputable regulator, such as the FCA.

Other important factors to consider when choosing silver brokers are:

• Look for silver brokers with low commission fees and spreads. Also watch out for deposit/withdrawal fees, account maintenance fees, overnight charges, and any other costs.
• The trading platform is key for traders, as it is the tool you will use to analyse silver charts and plan and execute trades. Popular trading platforms including MetaTrader’s MT4 and MT5, and TradingView are supported by many silver brokers, but some also offer proprietary trading platforms.
• Good customer support is important if something goes wrong with your account or with a trade. Ideally, look for silver brokers with access to customer support 24/7 through a hotline or a live chat feature.
• Payment methods are a key factor for many UK traders who have a specific setup for funding their online investing accounts. Most trading brokers accept debit cards and wire transfers, but you might need to look a little harder for a broker that trades in silver and accepts less common payment methods such as cryptocurrencies.
• Demo accounts can be the difference between successful trading and money down the drain, so it is important to find a broker that offers this feature to practice your silver trades.

Top Silver Brokers

Among the best silver brokers are:

• AvaTrade – One of the world’s best-regulated brokers, offering commission-free trading on more than 1,250 forex pairs, stocks, indices and commodities, including silver
• FXTM – Start silver trading with as little as £40 at this MT4 broker, with tight spreads and flexible leverage
• IG – Hundreds of thousands of clients use this well-regarded broker to trade silver CFDs and spread bets
• Pepperstone – Silver is among the many commodities, forex pairs, shares, ETFs and indices offered by this FCA-regulated CFD and spread betting broker.
• City Index – This UK-based, FCA-regulated silver broker offers an award-winning mobile app and supports MT4 and WebTrader

Market Hours

There are no specific spot market hours for trading silver, and you are likely to be able to trade 24/5 with forex brokers that offer XAG/USD and other silver pairs.

However, other silver brokers and markets will have specific trading hours, and even with forex, the market will ebb and flow as different regions start and finish their working days.

Silver Trading Strategy

A profitable strategy for trading silver online will depend on the timeframe and method you use to trade. Traders who execute a 30-second binary options contract are going to have very different considerations to the institutional trader who buys a large-scale, one-year silver future.

With that said, some basic steps are relevant to many silver trading situations:

• Research general market trends, daily trading volumes, and news to get the ‘big picture’ and find events that could affect silver prices
• Analyse charts to see silver’s performance against a range of other assets, such as gold and the USD
• Get a sense of the general trend and resistance levels for silver over the timeframe you want to trade
• Read up on a silver trading strategy and choose the relevant chart indicators for technical analysis
• Choose a silver broker with a demo account and practice your trading strategy before staking real money
• Set stop-loss and take-profit orders before executing your trade to manage risk

Bottom Line On Silver Trading

Silver is a great way for traders to get a taste of precious metals markets, and it provides significant trading opportunities as well as a safe haven during financial turmoil. It could be the basis of profitable trades during a market downturn, though since silver is more volatile than gold, it could prove a little challenging for rookie traders. Nevertheless, if you’re keen to invest in precious metals, there are many good silver brokers in the UK.

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