What are merits and demerits of trading Silver online?

Merits and demerits of trading Silver online

The price of silver may not be as high as that of gold, but its value has been very stable over the years, even surpassing gold in some cases.

Silver is both a precious metal and an industrial metal, which means that the dynamics of the silver market are very complex and will generate a lot of trading opportunities.

Merits of trading Silver online are:

• Silver is one of the few safe-haven assets that are negatively correlated with most other assets.
• Silver is both a precious metal and an industrial metal, providing conditions for market activity.
• The widespread use of silver in the solar energy industry has led to increased interest in the silver market, which has created trading opportunities.
• Traders can profit from rising and falling prices.

Demerits of trading Silver online are:

• Trading physical silver requires transportation and insurance. Fortunately, Deriv offers silver CFDs, which makes it easy for retail traders to trade silver and reduces transaction costs.
• The silver market is very complex and requires a lot of research to understand the current impact.

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Factors affecting the price of silver

The silver market is more complicated than the gold market. The transaction price of silver is usually the same as that of gold. However, because silver is used in a variety of industrial production processes, there are also certain differences compared with gold.

The supply of silver comes from mines and scrap metals, both of which are active industries. As the remaining silver deposits are dug deeper and deeper, the cost of silver mining is rising. Low silver prices lead to lower production, while high silver prices lead to higher production.

Silver has historically been used in photography, although demand has declined with the advent of digital photography and new printing methods. In fact, Hyundai has recycled silver from old photographic film and paper. In older production techniques, silver has also been replaced by cheap alternatives. However, silver is now also used in emerging technologies including solar technology.

Like gold, the price of silver is also affected by the factors driving the dollar’s ​​strength and the risk appetite of global investors. Silver is a safe-haven asset. When traders reject risks, the price of silver rises.

Cehck out Silver Price Chart on Deriv

Past Trend of Silver Market

In the past two decades, the price of silver commodities has been closely related to the price of gold. Silver prices experienced a bull market trend for many years from 2001 to 2011, despite the sharp drop in silver prices during the 2008 global financial crisis.

After the global financial crisis, the central bank began a period of quantitative easing policy. Due to market speculation on rising inflation, the price of silver rose to a new high. The price of silver hit a multi-decade high of $49.66 in 2011, when global stock markets pulled back sharply. Since then, the world has experienced periods of extremely low market volatility and lower-than-expected inflation. This led to a bear market in silver.

If financial market turmoil continues or inflation increases, the price of silver may rise again. Otherwise, the bear market may continue.

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How to invest in Silver on Deriv?

Deriv offers silver CFDs, which is one of the easiest ways to trade silver. To learn about silver trading, you can open a real account or a demo account at Deriv, and start paying attention to the price trends and news in the silver market.

Go to Deriv’s Official Website