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Trading Silver Futures: What You Need To Know

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Silver bullion with 99.9% purity

For silver futures traders, it is important to gain as much knowledge as you can about the precious metal you are trading to make the most of it. In this article we’ll discuss about silver and silver futures (plus a few tips) to help you gain an edge against other futures traders.

Silver Futures

The underlying asset for silver futures contract is silver bullion with 99.9% purity. Silver futures shares some similarities with gold futures. For example, it is traded in dollars and cents per troy ounce and has position limits set by the exchanges, it takes physical delivery and the most active months for delivery are March, May, July, September and December.

Silver Fundamental

Silver is such a unique kind of metal because it falls under both precious metal and industrial metal categories. It is considered as precious metal because it is rare, though not as rare as gold. It is used to make jewelries, arts and coins. As an industrial metal, silver is used in the production of x-ray films and electrical devices. Silver is mostly mined in Mexico, Peru, Canada, the US, Australia and Russia.

Nowadays, silver is sought after for its value as an investment, very much like gold. Apart from being traded in its physical form in bullion, silver is also traded as futures contract with the advent of silver futures contract. In fact, silver futures is one of the most traded futures contracts on futures exchanges worldwide. For example, Dubai Gold & Commodities Exchange (DGCX), Chicago Mercantile Exchange (CME) and Hong Kong Mercantile Exchange (HKMEx) all have silver futures traded at their exchanges.

Factors that move the silver price

What Moves the Silver Price?

  • The price of silver is dependent on the US and world economies. If the economies are strong, silver price will also increase. Reading economic reports is crucial for silver futures traders to gauge the silver price for the day.
  • Silver price is also affected by inflation. Its price increases with higher inflation; hence Consumer Price Index (CPI) report is your recommended reading material to gauge the amount of inflation in the economy.
  • Another factor that affects silver price movements is the daily inventory of silver bullions. It is much like crude oil where decreasing inventories will move the price higher. Reading reports on silver inventory helps you gain insight.

Trading Tips for Silver Futures Traders

  • Trading silver futures is an excellent tool against inflation.
  •  Silver and gold prices tend to move together so if gold price is high than silver price is most likely to be high.
  • As silver price is dependent on world economies, a crisis somewhere in the world will affect silver price to shoot or fall overnight. Holding silver futures overnight is risky as you might lose your investment in just one night.


Silver is not just used to make coins and jewelries but also is used in industrials such as photography and electronics. Therefore it is safe to assume that there is always demand for silver. Just remember silver futures trading involves substantial risk and is not suitable for everyone. Know your market, have the essential knowledge and trade with the money you can avoid to lose.


Wan Zuraiha Wan Zakaria is a staff writer at Oriental Pacific Futures (OPF) where she writes on investment and trading. OPF is a futures and options broker based in Kuala Lumpur, Malaysia and provides electronic trading, brokerage and clearing services to retail and institutional traders since 2007. OPF is licensed under the Securities Commissions of Malaysia and offers cash-settled derivatives instruments traded on Bursa Malaysia, as well as select major derivatives exchanges around the world.

Oriental Pacific Futures articles published on the Corporate Website ( may be reprinted, reposted or distributed free for educational purposes only on the condition that Oriental Pacific Futures and the Corporate Website link information are included. However, other organizations are invited to link to articles that are available in the public area of the Oriental Pacific Futures’ Learning Resources website. No additional permission is needed for such a link.