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What is the Silver Market?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 27 October 2016
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The silver market is a broad financial term for all of the markets around silver, which is a leading commodity as a valuable precious metal with many uses in manufacturing and consumer goods. Modern markets for commodities are complex, and the silver market likewise has many facets, including manifestations in national exchanges and in global Forex markets. The silver market includes many different opportunities for investors, from a basic raw silver price to many derivative instruments that offer “plays” on the value of silver as a commodity.

A main part of the silver market is based on the actual price of raw silver. Raw silver and gold are measured in troy ounces, often kept in bars or other bulk forms. Experts estimate that total raw silver holdings worldwide are about one half of total gold holdings. Investors can get information on the base prices of raw gold, silver, and other precious metals through exchanges. In the U.S., silver index funds that track silver prices offer accurate current pricing for raw silver.

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An additional part of the silver market is related to a wide variety of funds based loosely on silver pricing. Some of these funds are heavily invested in the stocks of mining companies or other firms with a hand in silver prices. These stocks may be traded on national stock exchanges in their respective countries and regions of the world, while the markets for silver as a commodity are kept in separate commodity exchanges. Investors can get involved in silver funds that pick and choose from all of the available equities and commodity contract offers on the general global market.

Some of the most accessible forms of silver funds with access to the global silver market are called exchange traded funds, or ETFs, and exchange traded notes, or ETNs. Large financial firms generated these financial instruments to allow the single investor to buy into silver easily, without getting involved in many separate purchases of global silver stocks and commodity futures contracts. ETFs and ETNs can be traded easily through local exchanges, and reflect specific values based on the value of silver. Some gain from a rise in silver prices; others gain from a drop in silver pricing. Some are leveraged to produce greater gains on a smaller price rise.

From commodity futures and stocks to complex funds, silver enthusiasts have a lot of choices. Trading silver can take many forms, and traders choose their own paths for hoping to profit from the value of this precious metal. Financial brokers and money managers can help an investor understand more about the greater silver market, and how to successfully invest in it.

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