Will silver appreciate more than gold? An explanation of how to invest in silver and maximize profits with a small amount of capital.

As we enter 2025, with the U.S. starting a rate cut cycle and rising regional conflicts and geopolitical risks, precious metals are on the rise. The price of silver has surpassed $34 per ounce, marking the highest level in about 10 years.

In this article, we will explain the following points:

• Why is silver more likely to rise in value than gold?
• What methods are available for silver investment?
• How can small investors operate wisely and gain profits with limited capital?

Gold VS Silver: Analysis of Key Differences

Many people tend to think that silver is cheaper than gold, and that investing in gold is more valuable and offers higher returns. However, the reality is different. Compared to gold, silver is preferred by many professional investors for the following characteristics.

Silver has a wider range of applications than gold. Silver is widely used not only in jewelry and investment but also in high-tech fields such as solar panels, semiconductors, electric vehicles, 5G devices, and AI servers. This makes silver not just a safe asset but also an industrial metal with growth potential.

◆ Silver is priced lower compared to gold. Based on past experience, the price of gold has fluctuated between about 30 times to 120 times that of silver, and silver investment offers a lower investment hurdle for investors with less capital.

◆ Silver has been experiencing larger price fluctuations compared to gold. Compared to gold, the price fluctuations of silver are larger, and when the market is on an upward trend, the "catch-up rise" effect is often seen, resulting in a wider potential profit margin. However, this also means that the risks of silver investment are relatively high, making it suitable for investors who can withstand short-term fluctuations.

📌Summary The price trends of silver and gold often move in the same direction. According to statistics from the Chicago Mercantile Exchange, the long-term price correlation coefficient between the two fluctuates between 0.4 and 0.8, indicating a clear positive correlation. However, silver has more complex influencing factors, requiring attention not only to the demand as a safe asset but also to the economic trends of the high-tech industry and manufacturing.

Analysis of Silver Price Trends

By the end of 2023, silver prices remained flat, fluctuating between 22 Dollar and 26 Dollar per ounce. Entering the second half of 2024, the market began to anticipate interest rate cuts in the United States, and due to the escalation of war and increased demand for safe-haven assets, silver prices started to recover.

In the first quarter of 2025, the United States officially began to lower interest rates, leading to a decline in the Dollar and a recovery in the electronics industry. The demand for silver for solar power generation and electric vehicles significantly increased. At the same time, copper prices soared, suggesting a tightening of metal supplies, which also pushed up the value of silver.

Currently, the silver price has reached 34 Dollars per ounce, marking a 10-year high. The year-to-date rise is about 14%, outperforming many other commodities.

The market sees that silver still has room for a rise, and the price of silver in 2025 is expected to fluctuate between 28 Dollars and 40 Dollars. However, investors need to be aware that the volatility of silver prices is significant and should manage risks appropriately.

Reasons why silver prices will rise in 2025:

• Increasing industrial demand: Silver continues to see expanded use in green energy sectors such as electronic devices, solar power generation, and electric vehicles, driving up demand.
• Strengthening demand for safe assets: As global economic uncertainty increases, investors are seeking safe assets, and attention is also being drawn to silver, one of the precious metals.
• Tightening of supply: The silver market has been in a state of supply shortage for several consecutive years, leading to a decrease in inventory and further pushing prices up.
• Gold and silver correlation effect: The gold price has surpassed its all-time high of 3,000 Dollar per ounce, and the silver price is rising simultaneously.

Detailed Explanation of Silver Investment Methods

For those interested in silver, here are five common investment methods introduced according to their levels of risk and flexibility:

1. Physical Silver (Silver Accessories, Silver Bars, Silver Coins)

Like gold, physical silver is the most familiar investment channel for the general public. From decorative silver jewelry to more investment-worthy silver bars and silver souvenirs, one can benefit from the rise in silver prices. The advantage is that it is close to the general public, and silver is relatively inexpensive, creating a low barrier to entry. However, physical silver also has issues such as the hassle of cashing in, low liquidity, and high transaction costs.

Overall, if the purpose is investment, I do not recommend buying and selling physical silver. The reason is simple: the transaction costs are high, and the process of cashing out is cumbersome.

2. Silver Account

Similar to a gold account, the purchasing method is very simple; you buy silver at the bank, and the bank stores it for you. Many banks in Japan allow you to open gold or silver accounts. For example, Mitsubishi UFJ Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation. It's important to note that investing in a silver account requires transactions at the bank counter, and it does not earn interest as it is not a deposit.

While periodic fixed transactions are possible in the account, we do not recommend this kind of operation due to high transaction costs. It is only suitable for long-term investors.

3. Silver-related stocks/Silver ETF

For stock investors, silver-related stocks (e.g., Pan American Silver Corp.) and silver ETFs (e.g., SLV) are one of the optimal ways to trade silver. Compared to physical silver, these investment methods have improved in terms of trading costs and trading time.

However, due to the lack of leverage and the limitation of trading direction to one way, it is suitable for stable holding.

4. Silver Futures

Silver futures are a mainstream leveraged trading method, and the most prominent futures exchange in the market currently is the Chicago Mercantile Exchange's silver futures (SI). The average daily trading volume reaches hundreds of thousands of contracts. The trading hours for silver futures (SI) extend to 23 hours, allowing for almost 24-hour trading, making it convenient for both buying and selling at any time, which is favored by short- to medium-term speculators. However, like many futures products, silver futures have delivery and rollover requirements, and it is important to note that delivery must be made before the expiration date or rolled over to the next delivery month.

Silver futures trading is more suitable for medium to short-term investors.

5. Silver Spot CFD

Silver Contracts for Difference (CFD) and silver futures have very similar trading logic - both are margin trading, have leverage, and allow for both buying and selling. However, silver CFDs have higher leverage, do not have the settlement date or rollover issues like futures, and are easier and more flexible to operate. Platforms usually provide settings for stop-loss, take profit, trailing stops, etc., making risk management easier. Like futures, CFD trading also carries risks, such as leverage risk, market risk, and regulatory risk. Additionally, the overnight holding costs of CFDs depend on the trader's direction and the platform's overnight fee settings, and the liquidity of CFDs may not be as stable as that of the futures market.

Silver CFD is more suitable for short-term, high-leverage investors.

How to maximize profits with a small amount of capital?

If you want to capture the price movement of silver with limited funds, try the following techniques:

• Trade small amounts with Silver CFD + use leverage (it is recommended not to exceed 5 times)
• Set stop-loss, take profit, and trailing stop appropriately.
• Use the gold-silver ratio and the trend of gold to determine trading timing.
• Capture turning points using technical indicators such as RSI and MACD.

Silver Contract for Difference (XAGUSD) is a flexible trading method that offers opportunities to profit from price rises and falls through price differentials. For example, trading platforms like Mitrade allow for operations such as the following:

• Rise forecast → Buy XAGUSD and open a "long" position
• Downward forecast → Sell XAGUSD and open a "short" position

Before opening a position, you can freely set the following parameters according to your risk preference: limit order or market order, trading volume, size of leverage, stop loss, take profit, trailing stop, etc.

Once the order is sent, the position is opened, and then the price movements are observed to close the position at the appropriate timing. If the directional judgment is correct, profits can be gained from the price difference, but in the opposite case, losses occur.

Silver (XAGUSD) trading example (for long position)

Assuming you trade silver on the Mitrade platform (starting price: 22.001, ending price: 23.001). This price difference of 1 Dollar will be your profit. By using leverage, the profit will be further amplified.

*Note: The transaction costs are not considered in the above example. Additionally, due to the effects of leverage, losses may also be doubled.

Futures silver usually does not exceed a leverage of 20 times, so its capital usage rate is about 1/5 of that of CFDs, resulting in a capital efficiency of 5 times.

What is the best time to trade?

When is the best time to start trading?

The timing of silver trading largely depends on the trader's actual experience and risk preference. Looking at it in Asia GMT+8 time,

👉 The optimal trading time is from 8 PM to 2 AM Japan time (the overlapping hours of the European and American markets).

This time period has the largest market fluctuations, clear signals, and high trading volume, making it the best time for short-term trading.

The movements of silver and gold are similar in terms of buying and selling direction, but the nature of silver as a safe-haven asset is relatively weak. Therefore, investors can determine the direction of silver in the following ways:

• Observe the movement of gold: The gold-silver ratio typically fluctuates simultaneously, and the movement of gold often serves as a leading indicator for silver.
• Combine fundamentals and technical analysis: Refer to the US Dollar Index, interest rate policies, prices of industrial metals, RSI/MACD indicators, etc.
• Refer to the Gold/Silver Ratio: Historically, the gold/silver ratio typically fluctuates between 50 and 80. When the ratio is too high (e.g., over 100), it indicates that silver is relatively undervalued, increasing the chances of starting a trade.
• Adjust strategies flexibly: Especially when the market style changes (whether risk preferences strengthen or weaken), the role of silver may shift from a safe asset to a risk asset, and special attention is needed in this regard.