How to Invest in Silver UK- Beginner’s Guide

Investing in silver UK after hitting an all-time high in mid-2020 is more relevant than ever, especially in a global economic environment that is expected to depreciate over the long term following the COVID-19 pandemic that has devastated the global economy. Silver is recognized as one of the best safe assets (always valuable), silver has benefited greatly in this context, and many investors have started to invest in silver.

So, this guide explains how to Invest in the silver UK, explains the different options available, and also helps you understand why investing in silver is a good ideal investment.

To Invest in the Silver follow these Quick Steps:

  • Step 1. Look for the Best CFD Broker to Invest in Silver.
  • Step 2. Open a business account
  • Step 3. Deposit your funds.
  • Step 4. Buy and Trade Silver.

Investing in Silver UK- Complete Tutorial

In the next section, we will show you how to invest your money in silver, silver, and precious metals using the simplest, most widely used, and easily accessible CFD trading. It is suitable for both those who want to trade silver with an online broker and those who want to invest in commodities and precious metals for the long term.

Silver

Step 1: Find a CFD Broker to Invest in Silver

The first thing you should do before investing in silver is to find an online broker that suits your needs and makes investing in silver easy and inexpensive. So, in this section, we introduce 3 brokers that we have chosen for the safety quality and benefits of silver trading.

eToro: The Best Option For New Silver Investors

eToro silver trading

eToro is considered one of the best and largest brokers not only in the UK but also internationally. The eToro broker is regulated by CySEC, FCA, and ASIC. Online brokers are also known as world leaders in social trading networks, which is their best feature. eToro also has very low silver transaction fees. The spread cost is 1.4 points. Silver purchase reinvestment is 0.008%

invest in silver on etoro

Advantages

  • Regulated, accredited, and established brokers
  • Silver trading fees with very low fees
  • User-friendly platform to easily invest in silver
  • Social trading platform with CopyTrader and CopyPortfolios
  • Easy and convenient account opening
  • $200 Minimum Deposit

Disadvantages

  • Withdraw $5
  • Lack of advanced trading tools
  • USD deposit with conversion fee only

AvaTrade

AvaTrade silver trading

AvaTrade is regulated by the Central Bank of Ireland and other international regulators in other parts of the world. Its headquarters are in Dublin, Ireland. In addition to the AvaTradeGo mobile app, Avatrade traders can trade on the MetaTrader 4 and MetaTrader 5 platforms.

Advantages

  • Internationally regulated and protected broker
  • Various silver trading platforms
  • Silver Trading Education Articles and Tutorials
  • Quick and easy account opening
  • Free deposit and withdrawal through various payment methods

Disadvantages

  • A platform not suitable for beginners
  • High inactivity rate
  • Slow payment: 3 days or more

Plus500

Plus500 silver trading

Plus500 is an online broker based in Cyprus, founded in 2008, regulated by SySEC and FCA in Europe and other international regulators. The Plus 500 provides a simple and easy-to-use web-based trading platform for inexperienced traders. However, the most advanced traders quickly reach the limits of the platform.

Advantages

  • European Regulatory Brokers
  • An easy-to-use platform, ideal for starting silver trading.
  • Relatively low silver transaction fees

Disadvantages

  • Limited feature platform for advanced traders
  • Lack of training and market analysis services

Step 2: Open a business account

To open a silver investment trading account, go to the eToro website and start registration. Registration takes only a few minutes. Click on that link and then click “Join Now”. This will take you to the registration page as shown in the image below. Then just choose a username, enter your email address and choose a password. This is the only information you need to register with eToro. Click on create account to complete the process.

Step 3: Fill out your profile

Before you start investing in silver in the financial markets, you should now create a trader profile. To do this, click on “Full Profile” in the left menu. Then answer questions about your identity, income, and experience in the financial markets. Finally, send us a copy of your ID.

eToro

Step 4: Deposit the funds

Once registration is complete and your account is complete, you can deposit funds. To deposit funds and fund your account to invest in silver, simply click the “Deposit” button in the lower-left corner of the screen.

You will then need to enter the amount and currency you want to credit. Finally, you need to select your preferred payment method and the corresponding information. Click “Submit” to complete the transaction.

Step 5: Trade Silver

Trading silver on eToro is very easy. First, you need to click on “Market” in the menu on the left side of the platform. Then you need to click “Commodities” in the top menu. Listed below are all raw materials available on the page, including silver named “SILVER”. To invest in silver, simply click “Buy” under SILVER.

eToro trade

Then follow the menu to open the Silver Purchase Location. You must enter the amount of silver you want to invest here. You can also set Stop Loss, Take Profit, and Leverage by clicking on the appropriate fields. Finally, if you want to make your first investment in silver, you need to click “Open Position”.

Ways to Invest in Silver UK

CFDs are the most accessible way to invest in paper silver, but it should be noted that other options have their advantages and disadvantages.

Buy Real Silver

real silver

The surest way to invest in silver is to buy real metal. Investment silver comes in the form of coins and ingots, and most coin and precious metals dealers offer silver bars in a variety of sizes and formats. You can usually find coins and rods as small as an ounce or as large as 1,000 ounces.

The advantage of holding silver bars is that their value is directly equal to the market price of silver. However, there are some drawbacks. First, you usually pay a small premium to buy silver from a retailer and often have to accept a small discount if you decide to sell it back to the dealer. If you want to store silver for a long time, the cost isn’t huge, but it’s usually too expensive for people who want to trade it frequently to carry it multiple times in a row.

Silver CFDs

One of the most popular options for investing in silver is through contracts for difference (CFDs). The products are easy to use and are offered by brokers like eToro and Libertex. CFDs are known as derivatives because rather than owning the underlying asset, they simply speculate about the price direction of the market.

CFDs allow you to make money when the market rises and falls. You also get automated management of your investments through Stop Loss Orders and Take Profit Orders and Margin Trading. This means you can control large positions with a small deposit.

Buy Silver ETF

Silver ETF

For traders, an exchange-traded fund that owns silver itself provides an effective alternative to owning precious metals directly. Each stock in a silver ETF is theoretically equivalent to a certain amount of silver, and ETF stock prices often closely follow the price of silver. Like other mutual funds or ETFs, silver ETFs have a fee charged to shareholders but are usually very small. For example, the iShares Silver ETF (NYSEMKT: SLV) has an annual cost ratio of 0.5%.

Silvermine stock

Another way to invest in silver through the stock market is to buy shares in a silver mining company. Silver-mining stocks typically rise in value when the price of silver rises and depreciates when silver is bad. Given the price of silver ingots, mine stocks are often multiplied by several percentages. However, the problem with silver miners is that they have to deal with the risks associated with their mining operations as well. Occasionally, a mining accident or poor exploration of a potential silver asset can cause a particular company to under-perform, even if the silver market is generally bullish. Owning a basket of mining stocks can provide some protection, but makes it difficult to hedge against this particular company risk.

Silver Streaming Company

Finally, investors can buy shares in the silver transfer company. The company does not operate its mining operations, but instead provides funds to miners and receives license fees or interest on production. Typically, transmission companies can buy silver production from mining partners for a fraction of the current market price, so they can get a refund and profit in their capital. A power transmission company’s stock rises and falls as the price of silver rises, but they are also affected by the quality of the financial transactions they can enter into.

Futures Contracts for Investing in Silver

Futures

Another way to indirectly own silver, futures is a very risky and highly leveraged option, not suitable for beginners. Even seasoned investors should think twice. In essence, a futures contract is an agreement between a buyer and a seller to trade a certain amount of silver at a specific future date and price. The value of the contract fluctuates with changes in the price of silver and the accounts of the seller and buyer are adjusted accordingly. Futures contracts are usually traded, so you should contact your broker to see if they support it.

Why Invest in Silver UK?

The fact that silver investing is becoming increasingly popular among investors is because there are many claims about investing in silver, especially during times of major crises like silver. The COVID-19 we are experiencing right now. In this section, we take a closer look at the top 5 reasons to hold the silver in 2021.

Invest in Silver as a Hedge against a declining Stock market

It is well known that gold and silver are inversely correlated with the stock market. In other words, when the stock market rises, silver tends to fall. And when the stock market goes down, silver tends to go up. For this reason, those who invest in the stock market often view silver as a hedge against market downturns. Investors invest in silver when market uncertainty is high and turn their backs when optimism is high and stock prices rise.

Silver Investment, the beginning of Inflation

Silver has always been a good hedge against inflation as its price tends to rise as the cost of living increases. Over the past 50 years, during years of high inflation, investors have seen silver prices soar and stock markets plummet. When fiat money loses purchasing power due to inflation, the value of silver expressed in fiat money increases mechanically. Silver is also considered a good store of value, so if you think your local currency is depreciating, you can encourage people to invest in silver.

Invest in Silver to Protect against Deflation

Deflation is defined as a period in which the economy is burdened by excessive debt, which has not been seen worldwide since the Great Depression of the 1990s, prices fall, and business activity slows. Infectious diseases may recur. During the Great Depression, the relative purchasing power of silver rose sharply while other prices fell sharply. The reason is that people chose to accumulate cash and the safest places to store it were silver and silver coins.

Protection against Geo-political Uncertainty

Silver retains its value in times of financial as well as geo-political uncertainty. It is often referred to as a “haven” because people take refuge in relatively safe places when global tensions escalate. During this time, it often outperforms other systems. Silver prices, for example, have seen significant fluctuations this year in response to the global economic devastation caused by the corona virus. Often, when there is little trust in the government, the price rises higher.

Increase in demand

Greater prosperity in emerging countries in previous years has stimulated demand for silver. In many of these countries, silver and silver are inextricably linked with culture. India is one of the largest silver consumers in the world. It is used there for many purposes, including jewelry making. The wedding season in India in October is traditionally the period of the highest global demand for silver. In China, where bullion is the traditional means of savings, demand for silver is constant.

Limited Supply with Production near Peak

Improved mining and discovery techniques have increased global silver production from 2,470 tonnes in 2005 to 3,150 tonnes in 2017. However, the amount of silver on the earth is limited. And experts agree that we are close to maximum production. The limited nature of underground silver reserves provides a supply-limiting argument, which has always been one of the main bullish arguments in favor of silver. Silver is expensive mainly because it is scarce.

Which Silver Investment is Right for You?

The best investment for silver depends on your needs. If what you want is full exposure to silver as a commodity, a physical bullion or silver ETF would be fine. The choice will depend on whether you want to hold the real metal for a long term or trade it.

For those looking for a return, mining stocks are more speculative and streaming stocks offer more stability and often higher earnings. Mining is capital intensive and most mining stocks do not pay dividends. However, as a financial company, transmission companies often pay dividends because they depend on sound cash flow.

Investing in silver is not for everyone. But if you think the market is ready to make a profit, and if you’re right, looking at the companies with the most exposure to silver will see the biggest gains.

Investing in Silver or Gold: Which Precious Metals Should You Buy?

Another popular precious metal is gold also known as a safe asset. Like silver, it was in the limelight in 2020 and hit a new all-time high.

Gold & silver

This section details the key differences between gold and silver in the tabular form before going into detail about the gold/silver ratio, which is often used to predict the price of gold or a currency.

SilverGold
VolatilitySilver has historically been more volatile than gold, which has several advantages for short-term traders.Historically, gold has been less volatile than silver.
AccessibilityThe affordable price/performance ratio makes the investment accessible to everyone. Silver is also easier to sell than gold, especially in physical form.Gold is much more expensive per gram than silver, making it less accessible and harder to sell.
StorageSilver requires more storage space than gold, which is reflected in higher storage costs and is also reflected in silver products such as ETFs.  Storage High gram values ​​allow storage of large amounts of gold liquidity in a small space. This reduces storage costs per Euro invested.
IndustryUnlike industrial silver, In addition to speculation, investment, and jewelry, silver is widely used in the industry to ensure a certain demand.  gold is not widely used in industry. Therefore, the demand for gold is mainly due to speculation and gems.
Reserves & StocksCentral banks do not have large cash reserves. If these metals become important to them, the impact could be significant.Central banks have large gold reserves and have tended to reduce them in recent years.

Gold/Silver Ratio and Precious Metals Investments

For precious metals, the gold/silver ratio can be a very valuable tool. The relationship between the spot price of gold and silver is known as the gold/silver ratio and is often used by investors to determine whether one of the metals is undervalued relative to the other.

The gold/silver ratio measures how many ounces of silver one ounce of gold can buy. The gold/silver ratio has leaned in favor of gold from 32:1 to 84:1 over the past decade, averaging 50:1.

So when the ratio is at historically high levels and investors expect the ratio to decline, this will reflect a decline in the price of gold relative to the price of silver. Investors have to buy or sell silver. At the same time, you found gold or both.

Conversely, as the index approaches historically low levels and expects a return to normal (average), you should short gold and silver or invest in both at the same time.

Conclusion: Should you invest in the silver UK in 2021?

Buying silver is becoming more important than ever, given the economic turmoil and uncertainty surrounding the Covid-19 pandemic that seems to have subsided over time. The sharp rise since early 2020 has partially exhausted its immediate upside potential.

Silver has many fundamental benefits that no other asset can boast of. Silver is also particularly suitable for active trading in the form of CFDs or long-term investments where physical silver is preferred.

So buying silver is a good investment idea right now, and as we have seen in this guide, eToro is the most advantageous broker to invest in silver and commodities in the form of easily accessible financial instruments.

Frequently Asked Questions

Where can I invest in silver at the best price?

As we have seen in this guide, the price of physical silver depends on several factors including supply and demand. Especially when it comes to paper silver and CFDs, eToro online broker fees are the most competitive.

Can I trade silver 24 hours a day?

As with forex currency pairs, silver and silver are traded 24 hours a day. Therefore, silver can be exchanged in the afternoon and evening.

What is the best way to invest in silver?

Physical silver has many advantages for long-term silver investments. ETFs are also suitable. For trading, CFDs are the best way to actively buy and sell silver in the market.

What is the difference between investing in silver and trading silver?

Investing in silver is investing in silver over a long period to take advantage of volatility over several years and protect a portion of your savings. Silver trading takes advantage of short-term silver fluctuations by alternating buying and selling.

What is the best broker for active silver CFD traders?

eToro has many advantages, including an easy-to-learn trading platform for beginners and competitive fees for trading silver on CFDs.