How to Invest in Silver UK – Beginner’s Guide

Did you know that since the low of 2020, the price of silver has risen more than 150%? If you purchased £10,000 worth then your silver investment would now be worth £25,000! The silver market has long been a store of value. Investors have historically used bullion and other precious metals to hedge against rising inflation and falling stock markets.

However, silver is a key component in electric vehicles and solar panels – two very hot stock market sectors that have been causing a surge in demand for silver bullion. With the price of silver skyrocketing and predicted to go even higher, there has been a huge demand in individuals wanting to learn how to invest in silver for beginners.

In this How to Invest in Silver UK Beginner’s Guide, you will learn everything you need to know on how to get started, including the benefits and risks of silver investment and the best way to invest in silver today!

How to Invest in Silver UK Quick Tutorial

Before we take a more in-depth look at how to invest in silver UK, here’s a quick run through oh how you can set up a broker account and invest in silver within minutes.

1. Choose a silver brokerage. To invest in silver we recommend eToro as the best way to invest in silver, due to its extremely low costs and excellent social trading tools.

2. Open an account. You can open an account with eToro easily and within minutes. Just type in some details on their application form and you’re good to go.

3. Deposit funds. With eToro, the first time minimum deposit is just $200 (£142). This can be deposited via bank wire transfer, debit/credit card or e-wallets.

4. Invest in silver! You are now good to go! Find the best silver investment for you and hit trade!

Well done! You’ve just invested in the silver market using the world’s biggest social trading platform which has more than 17 million users!

Step 1: Choose a Silver Investment Platform

When considering how to invest in silver, the choice of investment platform is essential. After all, it is your gateway to the world of silver investing so it needs to be easy to use, safe and secure.

In the section below, we discuss some of the best silver investment platforms for you to choose from. Whether you’re looking to invest 1000 pounds or invest £10K, the below brokers are great choices.

1. eToro – Overall Best Way to Invest in Silver

eToro logoeToro is a brokerage that has an impressive investment platform that is used by more than 17 million investors all around the world. Furthermore, they offer peace of mind and security as they are authorised and regulated by the UK FCA, CySEC, and ASIC.

From the eToro platform, you can access more than 2,400+ global markets including silver, gold, precious metals, and other silver-related products such as silver ETFs, silver mining companies, silver investment funds, silver currency pairs, and even silver derivatives to profit from rising and falling silver prices. Another great feature is the fact you can trade these asset classes 100% commission-free.

eToro silver chart

Even though trading the price of silver is 100% commission-free, there are other fees to know about. For example, the spread is a fee all brokerages will charge and is simply the difference between the buy price and sell price. If you trade silver derivatives via CFD trading, then there is also a small overnight financing fee that CFDs brokers will charge.

If you invest in real silver mining stocks or silver ETFs then there are no overnight fees and they are still 100% commission-free! Fortunately, with eToro, the spread and any overnight fees are super low and very competitive. Fees are important as you want to keep most of your capital gains in your back pocket!

eToro Sprott Physical Silver Trust

One of the reasons the eToro platform is so popular among investors around the world is that it allows you to copy other profitable traders and investors at the click of a button! The CopyPeople feature allows you to view the historical performance of other traders and if you like their results you can get the same trades copied into your own account.

For longer-term investors, eToro also provides an in-house managed investment portfolio called CopyPortfolio. These are ready-made investment funds for you to invest in and cover a wide range of themes such as Precious Metals and Energy, Cloud Tech Stocks, Drone Technology, Medical Marijuana, and many others.

One of the best ways to invest in silver is to make sure you have access to as many different types of silver investment products and markets to capitalise on. This provides a great way to diversify your portfolio when investing in bullion and precious metals.

Pros:

  • Regulated by FCA, CySEC and ASIC
  • Access silver investment products and precious metals
  • Invest in more than 2,400 global markets
  • Trade silver currency pairs 24/5
  • Invest in silver mining companies and ETFs
  • Access CopyPeople and CopyPortfolio for passive investing
  • Deposit and withdraw funds easily via bank, e-wallet, debit/credit card
  • Access exclusive, premium events from the eToro Club
  • 100% commission-free!

Cons:

  • Short-term technical traders may experience limited charting tools
  • $5 withdrawal fee

Your capital is at risk.

2. Libertex – Best Platform for Zero Spreads

Libertex logoLibertex is one of the world’s leading CFD brokers with a 23-year history and more than 2.9 million clients from over 120 countries around the world. The broker is authorised and regulated by the Cyprus Securities and Exchange Commission providing strong peace of mind for traders.

The Libertex trading platform is unique in that it provides investors to trade on more than 213+ financial CFD instruments covering currencies, stocks, commodities, indices, and cryptocurrencies. This means you can trade silver with zero spreads!

Libertex sponsors and partners

Your capital is at risk.

Libertex also provides the ability to trade silver on margin. This means you can control a larger position with a smaller deposit. For retail clients, the broker offers 10:1 leverage and for professional clients, the broker offers 100:1 leverage. This means professional clients could open a £100,000 position on silver using just a £1,000 deposit as margin.

The broker also provides traders with a range of different platforms including the world’s most popular platform MetaTrader 4. However, they also provide access to a proprietary, custom-built trading platform which has useful trading features such as sentiment indicators and live news and analysis.

Libertex Silver price chart

An account with Libertex can be opened easily and in just a few minutes. The minimum deposit is only €100 and can be done via bank transfer, credit/debit cards and e-wallets such as Neteller and Skrill. You can also access great customer support Monday to Friday 8 am to 8 pm CET via live chat, WhatsApp or Telegram.

Pros:

  • Regulated by CySEC
  • Access more than 213+ global markets
  • Trade using leverage
  • Easy to use trading platform
  • Low minimum deposit
  • Live analysis and news in the platform
  • Zero spreads!

Cons:

  • Not available to US residents

Your capital is at risk.

Step 2: Research Silver Investment

After you have chosen the right silver investment platform, the next step is to research the best way to invest in silver and when the best time to invest is. Let’s have a look at these in more detail.

Ways to Invest in Silver

There are a variety of different ways to invest in silver with each method providing its own unique benefits.

Investing in Physical Silver

As a newbie to the silver investing scene, you may think the traditional method of buying silver coins is the best way. If you have a bit more money to invest then you may even consider investing in silver bullion bars.

One issue that many newbies forget about, is where do you store your silver? If you store it at home then you have some real security risks, not to mention your household insurance going through the roof! This is why many investors choose to store their silver with a specialist storage company.

Silver bullions and silver coins

However, the fees to do this can get pretty costly and eat away at your returns. A lot of storage companies also charge based on the value of what you are storing so any capital gains on your silver investment will also come with higher costs, thereby eating away at your profit.

While it may sound appealing to store your coins or silver bars in specialist vaults located in London, New York or Zurich, there are minimum amounts. This means it could be an option for those planning a really large silver investment.

Investing in Silver ETFs

ETFs (exchange traded funds) are investment products that are managed by large financial institutions, mutual funds and asset managers like BlackRock and Morgan Stanley. An ETF is essentially a basket of different securities that tracks a certain index, commodity or sector.

For example, the iShares Silver Trust ETF (SLV) is a fund managed by the trillion-dollar asset management company BlackRock. The ETF holds more than 600 million ounces of physical silver and provides investors exposure to the changes in the price of this ownership.

It’s actually one of the most cost-effective and convenient ways to access physical silver as you don’t need to store it yourself!

eToro iShares silver ETF historical returns

ETFs are one of the best ways to invest in silver bullion for a variety of different reasons, such as:

  • Silver ETFs are created and managed by large financial institutions providing 100% safety and transparency of your silver investment.
  • ETFs are listed on the stock market via exchanges such as the New York Stock Exchange and London Stock Exchange. This means you trade it like a stock and buy and sell during market hours.
  • The fees charged by the ETF manager are generally quite low and usually around 0.5% annually.
  • You can invest in silver ETFs through UK stock brokers like eToro where you can buy and sell 100% commission-free!

Silver ETFs and ETCs (exchange-traded commodities) are very popular with large hedge fund managers and institutions who want a silver investment without worrying about storage and security. This is why they also provide good liquidity and are great for UK investors.

Your capital is at risk.

Investing in Silver Stocks

Many investors choose to gain exposure to silver through silver mining stocks that trade on the stock market. As mining companies extract silver and sell it on to commercial companies or investors, they are likely to benefit from a rise in silver prices.

This provides unique opportunities for investors who could capitalise on rising prices in precious metals, as well as rising prices in the stock market. This can have a combined effect of a stock moving much more than the price of physical silver.

For example, Pan American Silver Corp runs one of the larger silver mining operations in the world and you can invest in its share price through your stockbroker.

eToro Pan American Silver price chart

When silver prices rose more than 150% from the lows of March 2020 to the beginning of 2021, the share price of Pan American Silver Corp moved more than 280% higher.

With brokers like eToro, you can buy shares in silver stocks, invest in silver ETFs and start stock trading UK silver mining companies 100% commission-free and start investing from just $50.

Investing in Silver CFDs, Futures and Options

One of the most popular options to invest in silver is through Contracts for Difference (CFDs). The products are simple to use and brokers such as eToro and Libertex offer these. CFDs are known as derivatives as you are merely speculating on the price direction of a market, rather than owning the underlying asset.

If you believe the price of silver will rise you can buy at the market price, also known as the spot price. If you believe the price of silver will fall you sell. If the price of silver moves in your chosen direction you are making money, if not then you are losing money. Another option is via futures contracts which work in a similar way.

With CFDs, you can make money when the market rises AND when it falls. You can also use automated management functions for your investment through stop loss orders and take profit orders and trade on margin. This means you can control a large position with a small deposit.

Is Silver a Good Investment?

So, is silver one of the best investments? Since the 150% surge higher in silver prices during the volatility of the coronavirus pandemic, the future of silver prices has been talked about heavily in financial media.

Many analysts, hedge fund managers, and economists are now predicting a bull market for silver in the future for a variety of reasons listed below.

1. Demand for silver from investors is at a record high. At the beginning of 2021, the total holdings of silver bullion from global ETFs were at a record high of 1 billion ounces. Investors fled to the industrial metal as a safe haven from the pandemic and as a hedge against central bank interest rates. Demand also increased from retail investors after the Reddit WallStreetBets movement tried to squeeze silver prices higher.

2. Demand for silver from commercial companies is at a record high. Industrial demand now accounts for more than 50% of silver demand. The precious metal is a key component in solar panels, electric vehicles, and nuclear energy. All of these are hot sectors that are predicted to grow exponentially in the future driving the demand for silver even higher.

3. Silver supply is falling rapidly. The production of silver from the top ten mines around the world has been rapidly falling over the past several years. In fact, the silver supply peaked in 2015. If there is less silver going around, prices will rise even more.

Your capital is at risk.

Should I Invest in Gold or Silver?

Investing in gold and silver physical bullion are both good options for investors. However, over the past several years the gold to silver ratio is signalling that silver could now be the better option.

The gold to silver ratio indicates how much silver it takes to buy gold and whether the metal is overvalued or undervalued. The historical average is around 1.5% and it currently sits around 1.2% suggesting further upside is more likely for silver than gold.

While silver and gold loosely track one another, silver has historically underperformed gold but is now catching up. This is largely due to the fact silver has more demand from the industrial sector than gold and a recent pickup in the metal from China.

Bloomberg silver and gold comparison chart

With the silver price fluctuations rapidly catching up to gold, it could start to outperform the yellow metal making it a very interesting time to learn how to invest in silver!

How to Make Money from Investing in Silver

As we now know, there are a variety of products that can help you make money from a silver investment. The most common way is by the use of CFDs, so let’s have a look at an example using the eToro platform.

eToro Silver Trading Ticket

The order ticket above shows the following:

  • Current price of Silver $25.99
  • Order to buy at a rate of $30.00
  • Investment amount $10,000.
  • Exposure to silver $100,000 due to 10:1 leverage
  • Amount of silver units to purchase 3,333.33
  • Stop loss 50% of position amount (when silver reaches $28.50)
  • Take profit 200% of position amount (when silver reaches $36.00)

The leverage feature means investors can gain exposure to a much larger silver position using a smaller amount of capital. With eToro you can also use this feature to trade on the best silver ETFs and silver mining companies!

Your capital is at risk.

Silver Investment Strategies

There are a variety of different silver investment strategies used by investors which broadly fall under two categories:

1. Fundamental Analysis. This is the study of the macro-economic factors and supply and demand pressures on the silver to find what the price of silver would be in several months or years. It’s a style mainly used for long term investments.

2. Technical Analysis. This is the study of historical price action and technical indicators to find repeated patterns that show which direction the price of silver could move to next. This style is mainly used for day trading the market.

A much newer style of investing is through eToro’s CopyPortfolio feature. These are ready-made portfolios that are managed by eToro’s in-house investment committee and a great way to learn how to invest in silver for beginners.

They are easy to access and provide diversification in your portfolio. For example, you can invest in the Golden Energy CopyPortfolio at the click of a button which will give you exposure to energy and metals, including silver.

eToro Golden Energy Copy Portfolio Chart

Step 3: Invest in Silver on eToro

eToro is our platform of choice because it offers a broad range of silver investment products, allows you to invest 100% commission free and is regulated by the FCA, CySEC, and ASIC.

Step 1: Open an Account

Opening an account with eToro is super simple and only takes a few minutes. All you need to know is fill in your personal details and accept the Terms and Conditions.

eToro application

Your capital is at risk.

From here, you will be redirected to the eToro platform. To deposit funds and start commodity trading, you will need to fill out an application form with your employment details and experience level.

Step 2: Upload your ID

eToro will need to verify your identity and address for standard KYC and AML procedures for a regulated broker.

Only two documents are needed which can be uploaded to the platform:

  • A valid passport or driver’s licence
  • A bank account statement or utility bill issued within the last six months

eToro proof of identity

Step 3: Deposit funds in your eToro Silver Wallet

Depositing funds to invest with is simple. Just click the Deposit Now icon at the bottom left and follow the instructions! You can deposit funds in your silver wallet through a variety of methods, including:

  • Bank wire transfer
  • Debit/credit card
  • Neteller
  • Skrill
  • PayPal

eToro's deposit screen

Step 4: Choose your silver investment and invest!

In the eToro platform, you can invest in a variety of different silver products, such as silver CFDs, stocks, and ETFs. Once you’ve chosen the right one for you, all you need to do is click the Trade button!

eToro Silver ticket

Your capital is at risk.

The silver trading ticket shows you your exposure and allows you to choose your price levels and investment amount. It also details any overnight fees at the bottom. Click Open Trade to complete your transaction!

How to Invest in Silver for Beginners – Conclusion

In this How to Invest in Silver UK – Beginner’s Guide, we have gone through some of the best ways to invest in silver using bullion, CFDs, ETFs, and stocks.

Whether you are investing in physical silver or silver mining companies, the supply and demand dynamics affecting silver prices are presenting some very interesting long-term prospects for the metal

In order to get the most out of any upcoming opportunities, it is important to have the right broker and platform. From our research, eToro ticks a lot of boxes. Not only does it offer 100% commission-free trading, but it is also highly regulated making it safe and secure. Open an account for FREE and see for yourself!

eToro – Invest in Silver with 0% Commission

eToro logo

Your capital is at risk.

FAQs

Should I invest in silver?

Silver is presenting some very interesting long-term prospects due to pressures in supply and demand. Many analysts are forecasting higher prices for silver in the long-term due to increased demand from electric vehicles and solar panels, as well as its use as a safe haven.

Why invest in silver over gold?

The gold to silver price ratio is currently showing that gold is more expensive than silver and is one reason many institutions have been buying silver instead of gold. Silver is also showing signs of a huge increase in industrial use whereas gold is not.

What is the best way to learn how to invest in silver for beginners?

To learn how to invest in silver for beginners it's always best to start small and build up your experience. Make sure you read the whole of the guide above so you know the best way to invest in silver, the risks, and opportunities. Brokers like eToro help you start off with low minimum deposits and is a great place to start.

Can you profit from a fall in the price of silver?

Yes, you can! CFDs allow you to trade long and short which means you can profit from both rising and falling prices. For example, with eToro, you can trade silver CFDs. All you need to do is open a ticket and click ‘Sell.’ If the market goes down you are making money, if the market goes up you will be losing money.

Is silver worth investing in?

The long-term prospects for silver are very interesting due to a rise in interest from the Reddit WallStreetBets crowd, an increase in demand from electric vehicles and solar panels and the cheapness of the metal relative to gold. Whether it is silver bullion, silver ETFs or silver mining companies the case for adding silver to your portfolio is a strong one.

 

About Alan Draper PRO INVESTOR

Alan is the Chief Editor of Buyshares.co.za and is responsible for ensuring all the content on our site is accurate, relevant and helpful. He is an experienced editor who has worked for several leading online publications. Alan is also a writer and is an expert on the stock market.

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