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Silver Trading
Investing in the Silver Market
Silver has often been called the poor mans gold, taking a back seat to gold when traders looked for a safe-haven investment. Silver is considered a precious metal but not as rare as gold. While silver prices have always been far below the value placed on gold, prices of the two metals have generally tracked together as the factors that affect gold also tend to affect silver. Silver, however, has a wider range of uses and is priced for its industrial uses in electronics, photography, jewelry and elsewhere in addition to its financial role, increasing its significance for an investment portfolio.
Like gold, there are a number of vehicles for investing in silver in addition to silver futures and options. Those who choose to invest in physical silver can buy silver bullion, silver coins, silver medallions or silver certificates backed by silver in vaults.
Silver traders who prefer to express their interest in silver prices through stocks can invest in mining companies including penny stocks or in silver exchange-traded funds.
Silver Trading Information
Like gold, silver is traded at a number of exchanges around the world, including Sydney, Tokyo, Dubai and the worlds major silver futures exchange, the Comex division of the New York Mercantile Exchange (NYMEX).
- The full-size NYMEX silver futures contract is 5,000 troy ounces of refined
silver, not less than .999 fineness, in cast bars weighing 1,000 or 1,100 troy ounces each.
- Contract months are the next two calendar months, any January, March, May and September within a 23-month period and any July and December falling within a 60-month period beginning with the current month.
- Silver Prices are quoted in dollars per ounce, with the minimum price fluctuation one-half cent per ounce or $25 per contract.
- Straddles or spreads are traded in tenths of a cent, equivalent to $5 per contract.
NYMEX also trades a half-size miNY silver futures contract. However, activity has been limited and may not be liquid enough for active traders.
A report on silver warehouse stocks provides a daily amount of silver inventory on hand for possible delivery on futures contracts. A decrease in inventories can provide support for silver prices to move higher.
Another venue for trading silver futures is NYSE Euronext, which purchased the metals complex including mini- and full-size silver futures contracts that were traded at the Chicago Board of Trade prior to the CBOTs merger into CME Group.
Silver Trading Fundamentals
Newly mined metal provides most of the needed supply of silver, with much of it coming as a byproduct from mining for other metals. About 75 percent of the worlds annual supply of silver comes from mining production, with the remainder coming from government sales of silver stocks and from recycled scrap, including what is termed dishoarding as silver coins, jewelry and other silver products are melted down.
The top silver producing countries are Peru, Mexico, China, Chile and Australia.
On the demand side, about 54 percent of the worlds supply of silver is used in industrial applications, including a variety of uses in the electrical and electronic sector. Photographic demand continues to decrease, mostly due to lower consumer demand for color film because of further inroads from digital photography.
Jewelry fabrication continues to hold up well despite higher and more volatile silver prices, with noteworthy increases in silver demand for jewelry and silverware in China.
See how VantagePoint Software can predict the silver market
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Silver Trading Tips
If you trade silver, you want to watch gold and anything that influences gold prices as the two markets tend to move together. Particularly important for the prices of both precious metals are the government economic reports such as quarterly gross domestic product, monthly Consumer Price Index and Producer Price Index figures that measure the inflation rate and any other reports that reflect the countrys economic growth. Economic reports from other nations can also provide clues about silver demand.
Watch the spread between the gold and silver prices to move to one extreme or the other and expect it to come back to normal, buying silver and selling gold at the high end of the spread, for example.
Silver is an excellent commodity to have on hand if you are expecting high inflation and/or chaotic economic conditions because silvers lower values provide more flexibility for purchasing smaller items. For that reason, some people prefer to hold silver coins.
Be careful when holding silver futures overnight. In the volatile market conditions that have marked silver trading in recent years, the price of silver can make big moves from one day to the next. An unexpected crisis can occur at any time anywhere in the world, causing traders to look to the gold or silver markets to preserve their wealth. It is not uncommon for silver prices to open 20 or 30 cents higher or lower than the previous days close $1,000-$1,500 per contract and silver futures have been known to move $1 or even $2 intraday $5,000 to $10,000 per contract. Thats hardly a poor mans contract.
Silver Trading Resources
There are multiple sources for finding news and information about purchasing silver as an investment or trading silver for profit opportunities. Most major newspapers and other financial news sources that cover metals report the pricing and sales of silver. Government sources, exchanges and brokerage firms all offer many resources for silver traders.
One of the major sources of information is The Silver Institute, an international association of miners, refiners, fabricators, and wholesalers of silver and silver products established in 1971 to promote the interests of silver worldwide
Silver Trading History
Civilizations have been using silver going back 6,000 years, as silver deposits were on or near the earths surface, and the durable, malleable metal was used for jewelry and other artifacts that have been recovered. Mesopotamian merchants used silver as a form of exchange as early as 700 B.C., and the ancient Greek drachma and Roman denarius coins were made from silver. And then there is the English shilling "sterling," originally denoting a specific weight of silver, which has come to mean excellence.
Silver played an important role in the early days of the United States when Congress based the currency on the silver dollar and its fixed relationship to gold. Silver was used in U.S. coinage until being discontinued in 1965.
Silver gained a more important economic function as an industrial raw material at the beginning of the 20th century as new processes for photography, jewelry and electronics began to develop.
Breaking News
Softs
Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed down 41 points at 15.44 cents yesterday. Prices closed near the session low on profit-taking pressure. The key "outside markets" were mixed for the sugar futures market yesterday, as the U.S. stock indexes were steady-higher, crude oil prices were steady-lower and the U.S. dollar was lower. Sugar has been trading in a sideways range at higher levels for three weeks. Bulls need to push prices above this trading range to gain fresh power. That means pushing and closing prices above the May high of 16.03 cents. Sugar bulls do still have the near-term technical advantage. Prices are still in a seven-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 16.03 cents. Bears' next downside price objective is to push and close prices below solid technical support at 14.90 cents. First resistance is seen at 15.75 cents and then at yesterday's high of 15.88 cents. First support is seen at yesterday's low of 15.40 cents and then at last week's low of 15.26 cents.
Wyckoff's Market Rating: 7.0
Read More at TraderPlanet.com »
Livestock
Jim Wyckoff, Senior Analyst, TraderPlanet.com August live cattle closed down $0.20 at $81.62 yesterday. Prices closed nearer the session low yesterday and closed at a fresh two-month low close. The key "outside markets" were bullish for the cattle futures market yesterday, as the U.S. stock indexes were higher, crude oil prices were higher and the U.S. dollar was lower. Yet the cattle futures sold off anyway, which is a bearish clue. Cattle futures bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls' next upside price objective is to push prices above solid technical resistance at $83.90. The next downside technical objective for the bears is pushing and closing prices below solid technical support at the February low of $80.70. First resistance is seen at $82.00 and then at yesterday's high of $82.20. First support is seen at yesterday's low of $81.42 and then at last week's low of $81.22.
Wyckoff's Market Rating: 2.0
 Read More at TraderPlanet.com »
Soy Complex, Grain Futures
Jim Wyckoff, Senior Analyst, TraderPlanet.com
July soybeans on Friday closed firmer and near mid-range. The key "outside markets" were bullish for soybeans Friday, as the U.S. stock indexes were firmer, crude oil prices were higher and the U.S. dollar was sharply lower. Bulls do still have the near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at $12.50 a bushel. The next downside price objective for the bears is pushing and closing prices below solid support at $11.00 a bushel. First resistance for July soybeans is seen at Friday's high of $11.93 and then at last week's high of $12.00 3/4. First support is seen at Friday's low of $11.75 1/4 and then at $11.64.
[...] Read More at TraderPlanet.com »
Metals
Jim Wyckoff, Senior Analyst, TraderPlanet.com August gold futures closed up $7.60 at $962.80 yesterday. Prices closed nearer the session high yesterday, hit a fresh nine-week high and scored a bullish "outside day" up on the daily bar chart yesterday. Gold bulls have the near-term technical advantage and gained fresh upside momentum yesterday. Prices are in a six-week-old uptrend on the daily bar chart. Bears' next downside price objective is closing prices below solid technical support at $920.00. Gold bulls' next upside price objective is to push and close prices above solid technical resistance at the March high of $970.00. First resistance is seen at yesterday's high of $966.70 and then at $970.00. Support is seen at $955.00 and then at $950.00.
Wyckoff's Market Rating: 7.5.
[...] Read More at TraderPlanet.com »
Softs
Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed down 20 points at 15.74 cents yesterday. Prices closed near mid-range and were pressured by profit taking. Also, the key "outside markets" were mostly bearish for the sugar market yesterday, as the U.S. stock indexes were weaker and the U.S. dollar was stronger. Sugar bulls still have the near-term technical advantage. There are still no early technical clues that a market top is close at hand. Prices are still in a seven-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 17.00 cents. Bears' next downside price objective is to push and close prices below solid technical support at 14.90 cents. First resistance is seen at yesterday's high of 15.93 cents and then at the contract high of 16.05 cents. First support is seen at yesterday's low of 15.51 cents and then at 15.25 cents.
Wyckoff's Market Rating: 7.5
[...] Read More at TraderPlanet.com »
Livestock
Jim Wyckoff, Senior Analyst, TraderPlanet.com August live cattle closed up $0.05 at $83.82 yesterday. Prices closed near the session high again yesterday on more tepid short covering in a bear market. Prices last Friday did produce a bullish weekly high close. The key "outside markets" were mostly bullish for the cattle market yesterday, as the U.S. stock indexes were sharply higher and crude oil prices turned higher as the session wore on. Cattle bears still have the overall near-term technical advantage. Bulls' next upside price objective is to push prices above solid technical resistance at the May high of $84.40. The next downside technical objective for the bears is pushing and closing prices below solid technical support at the May low of $81.60. First resistance is seen at last week's high of $83.90 and then at $84.00. First support is seen at yesterday's low of $83.25 and then at $83.00.
Wyckoff's Market Rating: 3.5
 July Soybeans
Jim Wyckoff, Senior Analyst, TraderPlanet.com July soybeans on Friday closed weaker and near the session low on profit-taking pressure. Bulls still have the solid near-term technical advantage. Prices are still in an 11-week-old uptrend on the daily bar chart. The next upside price objective for the bean bulls is to push and close prices above psychological resistance at $12.00 a bushel. The next downside price objective for the bears is pushing and closing prices below solid support at the April high of $10.64 1/2 a bushel. First resistance for July soybeans is seen at $11.77 1/2 and then at last week's high of $11.89 1/2. First support is seen at Friday's low of $11.64 and then at $11.50.
$16.50 -------- the contract high
$11.45 3/4 --- 10-day moving average
$11.07 1/4 --- 20-day moving average
$10.53 1/2 --- 40-day moving average
$6.85 -------- the contract low
JULY SOYBEAN MEAL
July soybean meal on Friday closed weaker and near the session low on profit taking after hitting a fresh 8.5-month high early on. Bulls still have the solid near-term technical advantage. The next upside price objective for the bulls is to produce a close above solid technical resistance at $390.00. The next downside price objective for the bears is pushing and closing prices below solid technical support at $350.00. First resistance comes in at $380.00 and then at [...] Read More at TraderPlanet.com »
Energies
Jim Wyckoff, Senior Analyst, TraderPlanet.com July crude oil closed down $1.03 at $61.00 a barrel yesterday. Prices closed near mid-range yesterday and were pressured on profit taking and a lower U.S. stock market. Bulls still have the near-term technical advantage. A four- week-old uptrend is in place on the daily bar chart. The next downside price objective for the crude oil bears is to produce a close below solid technical support at this week's low of $56.76. The next upside price objective for the bulls is producing a close above solid technical resistance at $65.00 a barrel. First resistance is seen at yesterday's high of $61.87 and then at this week's high of $62.26. First support is seen at $60.00 and then at $59.00.
Wyckoff's Market Rating: 6.5
[...] Read More at TraderPlanet.com »
Metals
Jim Wyckoff, Senior Analyst, TraderPlanet.com June gold futures closed up $12.80 at $939.50 yesterday. Prices closed near the session high and hit a fresh two-month high yesterday. Prices were again supported by a weaker U.S. dollar yesterday. Gold bulls have the near-term technical advantage and gained fresh upside momentum yesterday. Prices are in a four-week-old uptrend on the daily bar chart. Bears' next downside price objective is closing prices below solid technical support at this week's low of $915.20. Gold bulls' next upside price objective is to push and close prices above solid technical resistance at the March high of $970.00. First resistance is seen at yesterday's high of $941.00 and then at $945.00. Support is seen at $935.00 and then at $930.00.
Wyckoff's Market Rating: 7.0
[...] Read More at TraderPlanet.com »
Softs
Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed up 2 points at 15.63 cents yesterday. Prices closed near mid-range yesterday. Sugar bulls have the near-term technical advantage. There are still no early technical clues that a market top is close at hand. Prices are still in a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 17.00 cents. Bears' next downside price objective is to push and close prices below solid technical support at last week's low of 14.90 cents. First resistance is seen at yesterday's high of 15.91 cents and then at the May high of 16.03 cents. First support is seen at 15.50 cents and then at yesterday's low of 15.37 cents.
Wyckoff's Market Rating: 7.0
[...] Read More at TraderPlanet.com »
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