How To Invest In Silver Australia?

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Metals have long been among us in different forms, shapes, and purposes. From forging an iron sword to producing the aluminum foil that we use today, everything has its association with metal, in one form or other. 

However, that’s not just all when it comes to metals. They’re further divided into different categories, and the one we’ll be talking about here is ‘Silver,’ the second most valuable metal after gold. 

As a commodity, silver has been a valuable asset that fits the safes and folios of many investors across Australia. 

Wonder why?

Because silver is on the rise! Analysts have been bullish on a significant price revision for silver, which has been long overdue following the movements of gold over the past decade. The instance of which was seen back in 2020 when silver hit a 27% YoY growth, moving faster than gold. Since then, wise investors have been looking around how to buy silver in Australia.

And if you’re one of those beginners who want to find out their ways around investing in silver in Australia, this blog is for you! Continue reading as we walk you through the different forms of buying silver in Australia.

A Look At Australia And Silver Mining

When thinking of investing in different precious metals in Australia, the chances are that you might have missed out on silver. Well, we get you! Australia is often highlighted for its rich supply of iron ore and gold as a nation.

However, if you’re an avid investor in metals and commodities, you might want to deposit your funds into silver. Being an emerging investment tool, silver is on the increase in the nation. And with new mines emerging, this precious metal has reached new heights in production potential.

Here’s a look at silver’s performance through the past few years: 

Being a volatile year, the year 2020 witnessed a sharp decline throughout the globe. Following four straight years of decline, the production of silver via mines fell by 5.9%, marking it the most significant loss in years.

In addition to the restrictions laid out by Covid-19 on the miners, the falling output resulted in a drop in production by 11.9 percent year over year. Furthermore, the extended closures of mines and halt in the supply chain saw a decline in production across countries like Mexico, Argentina, Peru, and Bolivia.

On the other hand, Australia was an exception, with production growing by 3%. Why? Because the nation was spared from the constraints of COVID-19. 

Generating an annual production of 43.8 million ounces in 2020, Australia stands out as the world’s fifth-largest producer of silver. Talking about silver’s current performance, the global demand for silver continues to rise, touching the 900 million ounces mark globally. 

Given the increasing demand that the metal continues to experience, we can say that it’s the best time for buying silver in Australia. However, if you’ve been confused about the what and how of putting your money in the metal, the next section is here to help you understand better. 

How to Buy Silver in Australia

Silver is a popular metal among investors for many reasons! While many consider it a commodity that can be liquidated in uncertain times, other investors view it as a precious metal, matching the likes of gold that moves with the markets. Investing in silver in Australia is a strategy opted for by the latter group of investors who want to ensure that they have a currency that cannot be inflated by low-interest rates or money printing.

When it comes to silver investment in Australia, you might be surprised to know that there are numerous ways to do so. From buying it outright to purchasing stock in mining units that manufacture silver, five of Australia’s top silver investment options are here. 

Coins or Bullion

The first method on our list is investing in physical silver in the form of bullions or coins. These assets act as a psychologically and emotionally rewarding investment method for investors of all types. In addition, once you have them in your possession, you can quickly liquidate them as and when required. 

Now, talking of the profits, you can easily benefit from investing in silver coins and bullion with the increasing price of silver. But, sadly, when investing in these physical assets, the only way you can profit from them is via the rising prices of the metal because the actual commodity won’t generate a cash flow like a business dealing in them. 

In certain circumstances, it’s even relatively simple to obtain. For instance, you might want to purchase the pre-1964 U.S. coins for their silver content, as the coins would come with around 90% silver. Besides, you might also want to consider checking for these coins at pawn shops and local merchants or other internet vendors that sell silver. Besides, you also can buy silver bars rather than simply coins from specialist vendors.

Risks: When investing in silver Australia, it’s possible that you can overspend on the actual silver content. Therefore, you might want to keep track of the current spot price to receive a fair deal. Similarly, suppose you are in a hurry to liquidate your physical silver. In that case, you won’t be able to obtain the total value for your actual silver, particularly if you’re liquidating via a dealer.

Additionally, if you’re investing in collector coins, keep in mind that you’ll almost pay more than the coin’s collectibility, which means you’re paying more than the actual price of the silver content. 

Silver Futures

Similar to the futures we trade in the stock market, silver futures act as a reliable and straightforward method of silver investment in Australia. Here, it would help if you placed your investment on the increasing or decreasing price of the metal without having to own silver in its physical form. While users get the option to take physical deliveries of their invested amount of silver, this is not the general motive we see among futures traders.

Because of the significant degree of leverage available in futures contracts, silver futures tend to be an appealing option to invest your funds in the market. To put it another way, you just need a small amount of money to acquire a significant stake in the metal. As a result, you may quickly gain a lot of money if silver futures move at your targeted price; you can also lose it readily if you’re wrong.

Risks: While futures might be an attractive option for buying silver in Australia, they are dangerous and should only be used by experienced traders. Futures contracts allow traders to use leverage in both directions, leaving you with a chance to magnify your earnings or losses. 

Additionally, you’ll have to add more funds to your trade if you want to retain the position if the market turns against you. And if you don’t, your broker will close the position, leaving you at a loss. Finally, you’ll normally need sizable funds and access to trade via limited internet brokers, to begin with, futures.

ETFs Owning Silver

The third option on our list is purchasing ETFs (Exchange-traded Fund), which hold actual silver (if you don’t want to acquire physical silver directly) but prefer investing in a lower-risk option than futures. In the case of ETFs, investors get rewarded with the rise in the price of silver; on the flip side, you might have risks like theft associated with the same. Talking of the return on ETFs, the return is generally calculated on the market price of the silver less the expense ratio of the ETF.

ETFs also have another benefit. You may sell your silver at market value, and the funds are quite liquid. As a result, you’ll be able to sell your money at the greatest possible price on any day the stock market is open.

Talking of the two most popular ETF options for investors in Australia are Aberdeen Standard Physical Silver Shares ETF and iShares Silver Trust (SLV). Traders may also choose to wager on the silver market via AGQ (ProShares Ultra Silver), an ETF that allows investors to hold futures contracts. However, it should be noted that it is a comparatively short-term risk compared to a long-term hold due to its structure.

Risks: Silver, like gold & other commodities, can be a risky financial tool, especially over short time frames. However, ETFs allow you to avoid some primary drawbacks of acquiring physical silver, like the danger of theft, illiquidity, and low pricing.

Silver Mining Stocks

Another option on our list of how to invest in silver Australia is the rather traditional way of owning stocks. Yes, you could profit from the rising silver market by owning stocks of organizations involved in mining the metal.

Here, you can gain from owning a mining company’s stock in two ways. To begin with, with the increasing price of silver, the company’s profits will also increase. If all other factors remain constant, silver miners’ profits will climb faster than the price of silver. Talking of the second instance, you can profit from the increased production capacity of the miner as it’d result in increased earnings for the firm. Again, this works as an additional technique to seize profits from your silver investments, rather than just buying stocks at a given price. 

Risks: Investing in a company is like betting on their performance! Therefore, when you invest in a company, ensure that you have conducted considerable research to ensure that you’re funding a high-quality firm that has the potential to succeed. Many mining organizations across Australia are high-risk businesses and have less experience in mining. Also, remember that these stocks can be volatile as their profits depend on silver’s market movement.

ETFs Owning Silver Miners

Last on our list is the easiest one so far! This is a method for investors who don’t want to get too much into research but still want to seize the benefits of owning one. This is where an ETF that holds silver miners is a good option. Here, you’ll receive a more diversified mining exposure with a lower risk than you generally would if you invested in one or two mining equities.

According to the ETF Database, SIL(the Global X Silver Miners ETF), SLVP (iShares MSCI Global Silver Miners ETF), and ETFMG Prime Junior Silver Miners ETF are listed as silver miners (SILJ).

Risks: A sector ETF decreases the price of miners that performs poorly, but anything that affects the entire industry, such as a drop in the price of silver, will undoubtedly have a substantial negative impact on the fund. Also, pay attention to what’s in those funds, as not all of them are made equal. For example, some may focus on higher-quality firms, while others may focus on junior miners who are riskier.

So that was a wrap on how to invest in silver in Australia! Given the five different ways of investing in silver, we bet you’re confused about any one way to go with it. But, yes, we understand the risks & rewards associated with every one of the investment tools. 

However, what if we told you that you could be investing in silver at the convenience of your home? Yes, it’s possible; all you’ll need is a reputable silver trading platform to get started with. And to help you out in connecting with one, we’ve listed a few silver trading platforms in the following section.

Silver Trading Platforms in Australia

Interactive Brokers

Founded in 1978, Interactive Brokers stand out as a leading exchange for investing and trading silver in Australia. The platform is regulated by several financial authorities, including US Securities and Exchange Commission, the UK’s FCA (the UK’s Financial Conduct Authority), Hong Kong’s Securities and Futures Commission, and Commodity Futures Trading Commission.

Talking of its features, the platform is easy to begin your silver investment journey. Users needn’t pay any trading commission and open their accounts without any fixed minimum deposit. Adding to it, users of all types can tap into the platform’s extensive offerings like ETFs, traditional stocks, futures, forex, and CFDs, adding to their diversified portfolio.

Besides the fact that the platform is listed on NASDAQ, what makes Interactive Brokers reliable is a significant market capitalization of $28.08 billion. Additionally, being a publisher of financial statements and a public company, the exchange is a reliable platform for millions of traders.

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Fee
 
Amount
 
Stock trading Fee 0.034% commission for Amazon
 
Forex trading Fee
 
0.008% commission for GBP/USD
 
Crypto trading Fee
 
1.23% commission for BTC
Inactivity Fee
 
$5 a month after 6 months
 
Withdrawal Fee
 
0
 

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Pros

  • Low-interest rates and margins
  • Users can buy and sell fractional shares
  • International stocks can be traded
  • Offers social trading services

Cons

  • Choppy UI for new traders

TD Ameritrade

Second, on our list of reliable silver trading firms is TD Ameritrade which continues to operate in the markets for over 40+ years now. Today, it is known to host users of all types to provide them with an extensive collection of investment tools like ETFs, stocks, and investment funds. 

In terms of the features, users can get free access to real-time level II quotes and streaming quotes, advanced charting options, and live-chat support. Additionally, users who want to deal with silver extensively can sign up for the platform’s fully-fledged silver trading platform.

Besides, you can also trade in silver for 23 hours a day using the platform’s reliable mobile application.

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MT4 Broker
 
Deposit Fees
 
Real-time Customer Support
 
Currency Pairs
 
Pepperstone No deposit fees
 
Yes
 
60
eToro
 
No deposit fees
 
Yes
 
47
 
CityIndex
 
£100
 
Yes
 
84
Plus500
 
No deposit fees
 
Yes
 
70
 
FxPro £100
 
Yes
 
70
 
CMC Market
 
No deposit fees
 
Yes
 
300 Forex Currencies
 
IG
 
£250 Yes
 
90
FXCM
 
£300
 
Yes
 
39
 

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Pros

  • Offering numerous funds and stocks
  • Includes futures, forex, and cryptos
  • Commission-free structure
  • Fast bank transfers

Cons

  • No options to fund via credit or debit card

Capital.com

Third, on our list of the top silver trading exchanges is Capital.com. This commission-free trading platform allows users to deal with the lowest spreads. You can begin your investment journey with funds of as little as £20 via debit card, credit card, or bank transfer.

In addition, users attract zero charges for withdrawals, deposits, or inactivity. You can choose from several charts and technical indicators in terms of trading convenience. You can also use advanced tools like pattern tracking to increase your profits using AI.

Regulations from FCA and CySEC back Capital.com. Additionally, their 24/7 customer support via email, phone, and live chat makes them a reliable option to get started.

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wallet
Number of Cryptos
 
Pricing Structure
 
Bitcoin Trading Fee
 
Minimum Deposit
Kraken
 
100+

 
1.5% fee for crypto

 
1.5%
 
0.0001 BTC
 
Binance
 
500
 
Maker Taker fee
 
0.35% maker fee & 0% taker fee
 
$50 AUD
 
eToro 58
 
Tight spreads
 
1% + spreads
 
$50
 
Atomic
 
300+
 
2% fixed
 
2%
 
$10
 
Coinbase 100+
 
Spread, fixed fee
 
0.4% maker fee 0.6% taker fee
 
$2
 
Exodus
 
155+
 
Spreads
 
None
 
None
 
ZenGo
 
30
 
Floating %
 
Based on payment methods used
 
None
 
Bitpay
 
13
 
Spreads 1% processing fee
 
None
 

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Pros

  • 24/7 customer support
  • Commission-free CFD trading
  • Multiple investment tools
  • Powerful analysis platform
  • CySEC & FCA regulated

Cons

  • Limited leverage of stocks

eToro

Next, we have eToro, a significantly new silver investing platform. Currently enjoying a user base of 13+ million clients, it allows its users to invest in silver via ETFs. Talking of the list of options, users can start their investing journey with either the SPDR ETFs or the SPDR silver shares currently listed with the broker. 

Purchase and sales of shares and ETFs over eToro are commission-free. In addition, the platform charges no fee to keep your silver investments with them. Advanced traders can make use of the 1:20 leverage to extend their profits. 

Another striking feature of the eToro platform is simple liquidity. For example, if you feel that silver is overpriced at a certain level, you can sell it instead of shorting it. eToro allows users to invest in silver CFDs without any commission as well. In terms of its regulation, eToro is backed by FCA. 

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Crypto Exchange Number Of Coins  Payment Methods Minimum Deposit
eToro 50+
 
Debit/credit cards, e-wallets, bank transfer
 
$50
 
Capital.com
 
470+ pairs
 
Debit/credit cards, e-wallets, bank transfer $20 (debit/credit cards and e-wallets only)
Crypto.com
 
250+
 
Debit/credit cards, e-wallets, bank transfer
 
$20
 
Coinbase
 
50+
 
Debit/credit cards, bank transfer
 
$50
 
Digital Surge
 
300+
 
Debit cards (third-party) and PayID
 
$2
 
Binance 1000+ markets
 
Debit/credit cards (third-party) and PayID
 
Depends on the payment processor
 
CoinSpot 350+
 
Debit/credit cards (third-party), POLi, PayID
 
$1
 
Swyftx
 
310+
 
Debit/credit cards (third-party) and PayID $30
 

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Pros

  • Simple UI
  • 0% commission
  • Numerous assets to invest in
  • Low spread

Cons

  • Limited features for advanced traders

Libertex

Last on our list is Libertex, yet another reliable trading platform with over 2+ million registered users. Backed by CySEC regulation, Libertex has established itself as a safe platform for stock traders and investors of every type. 

The platform offers extensive tradable assets, including EFTs, cryptos, and stocks. Talking of its fee structure, users attract two different types of fees on their Libertex account. First, the platform charges a transaction fee for opening a position, varying according to the size of the trade and asset type. Second, users need to pay a certain spread, averaging 0.1% and 0.2%.

To get started with Libertex, customers need to pay a deposit fee of €100 (£85) via their bank accounts, credit/debit cards, or e-wallets. Additionally, the platform’s web and app-based trading platform provides the users with both MT4 and MT5 functionality. 

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Platform Minimum Deposit Comission Deposit fee Withdrawal
AvaTrade 100$ Zero Zero Zero
Capital.com 20$ Zero Zero Zero
XTB None Zero on stocks CFD Zero Zero
VantageFX Zero 6$ Zero Zero
Plus500 100$ Zero Zero Zero

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Pros

  • Low spreads on CFD
  • 1:30 leverage available
  • Supports MT4 & MT5
  • Clean & simple UI

Cons

  • Irregular fee structure

Is Silver A Good Investment?

Silver appeals to investors for many similar reasons that gold and other precious metals do! Here are a few of the most compelling arguments:

 

  1. Returns: Silver has outperformed widely recognized asset groups such as stocks over a period of time. Silver can be used as a store of value and can even increase in value over time, allowing investors to earn a profit from their investment.

 

  1. Liquidity: Silver is a liquid market in general, and particular types of silver assets are extremely liquid. Silver’s attraction stems from the fact that it is less connected to other asset markets, such as equities, allowing it to operate as a hedge against such markets.

 

  1. Diversification: Since it’s co-related to gold, silver is a safer way to diversify your portfolio. Moreover, investing in silver can significantly reduce your risks and increase the returns significantly.

 

However, silver isn’t a metal that comes with drawbacks and risks.

Because silver does not generate cash flow, it’s challenging to know when it’s a good moment to buy. In addition, unlike stocks, where the movements are determined by the company’s operations and current status, it’s difficult to predict the movement and prospects of silver.

Additionally, since silver cannot generate a cash flow, profit-seeking investors need to look for buyers willing to pay a higher price for the precious metal. 

Given the volatility that it attracts, it is always wise to invest in silver or any other precious metal only once you have a complete idea of the what, why, and how’s. All the best with your investment journey! 

FAQ

 Can I profit from trading or investing in the silver price?

Yes, depending on the position in which you lock your trade, you can profit from the trade. While beginner investors are limited to profiting via investing, advanced investors can trade silver markets and utilize the price movement for profits.

 How do you trade or invest in silver?

There are multiple ways of trading or investing in silver. You can begin your trading journey using futures, spot markets, and options. Additionally, you can also invest in silver via ETFs and stocks.

 What moves silver markets?

Being an incredibly volatile metal, numerous factors affect silver’s movements. Some include its industry use, USD value, inflation, and other metals demands.

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