Silver is one of the most used precious metals along with gold and platinum. With its physical and chemical properties, it partly resembles gold and the copper, which is why it is placed between the two on the periodic table. Silver can be sometimes found in nature on its own, but in general, it is extracted as a by-product in the ores of other metals such as copper, gold, lead, zinc and copper-nickel ores. Hence, the quantity of silver produced is tightly related to the production of these metals. The commodity can also be recovered from silver scrap metal which is recycled.
Thanks to the highest degree of electrical and heat conductivity among the metals, silver is a versatile commodity used in a variety of ways across different industries. It has wide application in industries such as electronics, medical, energy as well as in jewellery. Because it is a scarce precious metal, it is also used as an investment asset and as a means to store value. Throughout history it was often used as a currency.
The silver value can be influenced by both industrial and economic factors. Namely, supply and demand of silver can move the value upwards or downwards as well as the inflation rate and the changes in the gold price. While there might be a slight decrease in the supply for silver, industrial and overall demand for this precious metal remains stable during normal economic activities.
The silver price has an inverse relation with the US dollar, meaning that when the dollar value falls, silver price tends to increase. Hence, investors should put silver related news on their watchlists to be able to detect potential impacts on the silver spot price.
Derivative instruments related to this precious metal can be found on different commodity exchanges such as the NYMEX or the Intercontinental Exchange. The silver spot price may be quoted per ounce, per gram or per kilo.
The weekly price chart shows that silver was moving within a range for a better part of the last decade. It reached the highest price for the 2010/2020 period in April 2011 when silver was trading at around $49 (£40) and afterwards the value was gradually decreasing.
Also, from the daily price chart, it can be seen that during the second half of 2019 the silver price was also moving sideways until it broke the support level, which was defined around the $16.5 (£13.4) on 12 March 2020.
So, how to invest in silver and which investment method is preferred? Well, there are different ways through which you can invest in silver: you can hold the commodity in its physical form or you can trade derivative instruments.
Investing in the physical form of silver means that you purchase silver bullion or silver jewellery and sell the holding when it reaches the desired price. However, this form of investing decreases your liquidity and it requires that you keep the silver somewhere safe. Also, you might need to pay a price that is above the silver spot price because the dealer adds a certain margin above the spot price to cover their business expenses.
Trading derivatives like futures or options are another way for trading silver and more experienced traders usually use them. When trading futures, you need to pay attention to close the contracts or otherwise, delivery should take place. On the other hand, trading options do come with certain benefits but keep in mind that you pay a non-refundable premium to the seller. So, in case you have a smaller amount of capital for investing, the premium can eat up a portion of your available capital.
The tokenised assets offered by Currency.com may be a preferred mode for trading silver. Currency.com created tokens through which you can profit from the silver price movement without actually holding the silver or paying a premium. When you purchase a tokenised silver, you speculate on the price changes and with a well-developed strategy, you can open profitable positions.
The tokenised assets are enabled due to the blockchain technology utilised by Curency.com, which is used to create tokens for real tradable assets available on the exchanges. The process of recording data and keeping track of transactions is much easier and efficient with blockchain technology. Also, third-party intermediaries can be eliminated from the trading process.
In addition, trading tokenised commodities is even easier if you own cryptocurrencies such as Bitcoin or Ether. Currency.com’s leveraged trading platform gives traders the opportunity to trade tokenised commodities with crypto or fiat. You don't have to bother to convert your crypto into fiat money before you trade silver.
Also, silver trading with tokens means that you can speculate on larger positions with smaller capital due to the leverage available from Currency.com. You can buy tokenised silver with capital enough to cover a fraction of the position's value and this fraction is 0.5 per cent margin. It shows that Currency.com offers a leverage of up to 1:200 when you decide to trade tokenised silver using its leveraged trading platform.
Imagine that you want to enter a position with silver valued at $5,000 (£4,075), but you have only $300 (£244) of capital available. You can only open positions up to the amount of capital you have. But this is not the case when you trade tokenised silver on Currency.com because you can open the same $5,000 position with the 0.5 per cent margin or just $25 (£20) of your capital. Accordingly, you will make a profit from a position worth $5,000 by investing only $25 of your capital.
By now, there are plenty of benefits in favour of trading tokenised assets, yet there is also one more benefit. The silver trading process on the Currency.com trading platform is very easy to understand and it consists of the following steps:
Step 3: Using the margin offered by Currency.com, you should define the value of your position.
Silver trading at Currency.com’s tokenised assets exchange has a number of advantages. Tokenised assets are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument's price.
Trade tokenised silver with Bitcoin or Ethereum. Benefit from the commodity's price movements without turning your crypto assets into fiat.
Trade tokenised silver with a tight market spread, benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world's top markets, like silver, with up to 1:200 leverage.
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
We have a scalable and low latency order management system, which can execute 50 million trades per second.
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Trade the global financial markets using Bitcoin or Ethereum.
Keep an eye on your positions with over 75 advanced charts, price analysis and price alerts.
Use stop-loss and take-profit orders to keep what you earn.