How to Invest in Silver

As a precious metal which also enjoys considerable industrial demand, silver offers quite a unique investment profile. In this article, we’ll examine the various methods of investing in silver, highlight its advantages and potential risks, and provide a step-by-step guide of how to invest in silver in 2026.

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

Key Takeaways

• Investors use silver for diversification, as an inflation hedge and also as a safe haven. However, its wide application in certain technology may offer growth potential as well. 
• Silver prices tend to be more volatile than gold, and its industrial demand may negatively impact silver’s effectiveness as a safe haven. 
• Prices can be influenced by a number of factors, including interest rates and demand for other metals. 
• Investors can gain exposure through the physical metal, silver mining stocks, silver ETFs/ETCs or by trading derivative products such as silver CFDs.

Why Invest in Silver

Like gold, silver has been highly sought after by humans for thousands of years. Although many invest in silver for similar reasons as gold, silver may also attract attention due to its considerable industrial demand. 

• Safe Haven: Many investors consider silver to be a safe haven asset, meaning that it can experience increased demand during periods or geopolitical or economic uncertainty. 
• Inflation Hedge: Silver is also viewed by many as a potential hedge against inflation. When inflation increases rapidly, many investors turn towards inflation hedges in an attempt to preserve their purchasing power. 
• Diversification: Silver can be used to help diversify an investment portfolio, as it behaves differently to assets such as stocks and bonds. 
• Accessibility: Silver shares some of the same qualities of gold - which is also used as a safe haven, inflation hedge and as a portfolio diversifier. However, silver is considerably cheaper per ounce, which might make it more accessible for retail investors with a smaller budget. 
• Growth Potential: Silver is widely used in modern technology, including electronics, solar panels and electric vehicles. If these industries continue to grow, demand for silver may increase. 

Disadvantages of Silver Investing

Whilst silver may offer several potential advantages as part of a portfolio, there are also a number of disadvantages which investors should bear in mind. 

• No Income: Unlike other assets, such as stocks and bonds, silver does not produce any income. This means any potential returns are reliant on price increasing. 
• More Volatile Than Gold: We already noted that silver shares some of the same characteristics as gold; however, its price tends to be considerably more volatile, which can increase trading and investing risk. Nevertheless, although it can increase risk, higher volatility may appeal to traders looking for short-term trading opportunities. 
• Industrial Demand: We previously listed this as a positive, but it has the potential to cut both ways. Whilst industrial demand may support silver prices during economic expansion, declining industrial demand may weigh on prices during an economic slowdown. This may negatively impact silver’s effectiveness as a safe haven. 

Of course, the specific risks associated with investing in silver may vary depending on which instruments traders and investors use to gain access to the precious metal.

5 Top Ways to Invest in Silver

There are a number of different ways for investors to gain exposure to silver. Which option is most suitable will largely come down to the investor in question, their investment goals and their appetite for risk.

In the following sections, we’ll take a look at 5 of the top ways to invest in silver.

Buy Physical Silver

When thinking about investing in silver, this may be the most intuitive option. Indeed, it’s the only option which provides investors with direct exposure to silver prices and direct ownership of the precious metal.

Consequently, this is probably going to appeal most to long-term investors who place value in having direct, tangible ownership of silver.

However, investing in physical silver comes with logistical issues which investors will need to bear in mind, including transportation, insurance and storage. These issues aren’t individual to silver; investors would need to consider these issues with other physical assets, such as gold.

Nevertheless, it’s worth noting that storage requirements for silver are typically greater than those for gold. This is primarily because silver has a significantly lower value per ounce than gold.

In other words, an investment in physical silver will involve storing a larger quantity of metal than an equivalent investment in gold. In fact, at the time of writing, one ounce of gold is worth more than 60 times the price of one ounce of silver.

Silver Mining Stocks

Silver mining stocks are the shares of companies which produce silver.  

Naturally, the performance of these companies is influenced by the price of silver, which provides investors with indirect exposure to silver prices. Many mining stocks are also dividend payers (although dividends are never guaranteed), meaning that investors may be able to generate income from their investment.

However, there are a few things to bear in mind. Firstly, besides the price of silver, the value of silver mining stocks can be influenced by a variety of company specific factors, such as management decisions. If the goal is to gain maximum exposure to silver prices, this might be an issue.

Furthermore, silver mining stocks tend to produce silver together with a variety of other metals. This might appeal to some investors, as it diversifies the company’s revenue stream. However, again, if the goal is maximum exposure to silver, this may be problematic for some.

For example, Pan American Silver is one of the largest silver mining companies in terms of market capitalisation and production. However, in 2024, its silver segment accounted for less than a quarter of total revenue.

Physical Silver ETF / ETC

A physical silver Exchange-Traded Fund (ETF) is a fund which aims to track the price of silver by buying and holding physical bullion on behalf of its shareholders. ETFs are listed on stock exchanges, where they are bought and sold in the same manner as a company’s shares. 

In the EU and UK, ETFs are prohibited from investing in a single asset under UCITS diversification rules. Consequently, physically backed silver products in Europe are typically structured as silver Exchange-Traded Commodities (ETCs).

Physical silver ETFs/ETCs provide shareholders with direct exposure to silver prices, whilst removing many of the logistical issues associated with owning the physical asset.

The fund takes care of buying and storing the metal; however, in exchange for this management, ETFs and ETCs have an ongoing annual charge. For example, the iShares Physical Silver ETC has an expense ratio of 0.20%.

Nevertheless, although they provide exposure to silver prices, physical silver ETFs/ETCs do not provide investors with direct ownership of the metal. 

Silver Mining ETFs

Silver mining ETFs are funds designed to track indices composed of silver mining companies.

Rather than picking individual silver mining stocks, investors can gain exposure to a wide range of companies through a single investment. This built-in diversification can help mitigate some of the company-specific risks associated with investing in individual mining stocks.

Given that many silver mining companies pay dividends, these types of ETFs may also distribute dividends to shareholders. However, like physically backed silver ETFs, silver mining ETFs will also charge an ongoing annual fee.

An example of a silver mining ETF is the Global X Silver Miners UCITS ETF.

Trade Silver Using Derivatives

As well as investing in silver using the methods examined above, it’s also possible to trade silver using derivatives. 

Derivatives allow traders to speculate on silver prices without taking ownership of, or delivering, the underlying asset. Unlike more traditional investment options, trading derivatives allows traders to potentially benefit from both rising and falling prices.  

However, they are primarily used for short-term trading and may not be suitable for longer-term exposure. Derivatives are also complex instruments which are associated with a higher degree of risks. Consequently, they are not suitable for everyone. 

Silver derivatives are typically traded using leverage. Whilst this can magnify potential profits, it has the same magnifying effect on potential losses, and so must be used with caution. In addition to being used for speculation, derivatives may also be used for hedging existing investments against adverse price movements. 

The most common types of silver derivatives include:

• Contracts for Difference (CFDs): Silver CFDs represent an agreement to exchange the difference in the price of silver between the opening and closing of a position. 
• Futures Contracts: Silver futures represent an agreement to buy or sell silver at a predetermined price on a fixed date in the future. 
• Options Contracts: Silver options give holders the right, but not the obligation, to buy or sell silver at a predetermined price by a fixed date in the future. 

Factors Affecting Silver Price

Silver prices are ultimately determined by levels of supply and demand in the market. As a precious metal and a commodity which is widely used in industry, silver prices can be influenced by a number of different factors. 

• Industrial Demand: More than half of silver’s demand is from industrial application. Consequently, it can be a significant driver for silver prices. 
• Safe Haven Demand: During times of economic or geopolitical uncertainty, investment demand for silver may increase due to its status as a safe haven. 
• Interest Rates: Generally speaking, higher interest rates make non-yielding assets such as silver less appealing to investors. The opposite is also true. 
• Inflation: Silver is often used as a hedge against inflation. Therefore, if inflation rises rapidly, demand for silver may also increase, pushing up prices.
• Supply/Demand of Other Metals: The majority of silver is produced as a byproduct of mining other metals, primarily copper, zinc and gold. Consequently, a large proportion of the global silver supply is tied to the supply of these other metals.For example, if global copper production increases, due to being a byproduct, silver production is likely to increase as well. 
• Gold Prices: Gold and silver prices tend to be positively correlated. Therefore, some investors monitor what’s known as the gold-to-silver ratio, which compares their prices, to assess whether silver is historically over or undervalued compared to gold. 
• US Dollar: Like most commodities, silver is prices in US dollars. Therefore, when the USD weakens, silver becomes cheaper for foreign buyers, which may boost demand. The opposite may also be true. 

How to Invest in Silver in 2026

In order to invest in silver, amongst other things, you’ll need to pick which investment method aligns with your goals, financial situation and risk appetite. Here’s a step-by-step guide of how to get started:

• Define Your Goals
  • Are you investing for the long-term or looking to attempt to exploit short-term price movements? Do you want direct exposure to silver prices or would you rather the prospect of potential income?
• Choose an Investment Method 
  • Which method of investing in silver best suits your trading/investing goals? 
• Select a Broker  
  • Register with a broker which provides access to your chosen market. 
• How Much to Invest 
  • How much of your portfolio do you want to allocate to silver?  
• Place Your Order and Monitor Your Investment 
  • Open your broker’s platform, select the desired asset, fill out the trading ticket and send your order to market. 

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