Silver Investment Boom: Why Are Small Investors Flocking to Buy Silver? Five Trading Strategies to Help You Double Your Profits

Why Silver Can Surpass Gold? The Truth Behind Market Perception

Many investors are accustomed to buying gold, believing that gold is more valuable and offers more stable returns, but this idea is being rewritten by the market. Although silver is cheaper per ounce, it has growth potential that gold cannot match.

Industrial Use Determines Long-Term Value

Silver is not just a safe-haven asset but also an essential commodity in the tech era. Solar panels, electric vehicles, semiconductors, 5G infrastructure, AI data centers—these future industries all heavily rely on silver. According to market data, as the green energy transition accelerates by 2025, silver demand will grow at over 20% annually, transforming silver from a traditional precious metal into an industrial necessity. In contrast, gold mainly remains in safe-haven and decorative uses, with limited growth space.

Low Price Base Creates Leverage Effect

The price ratio between gold and silver fluctuates roughly between 30 to 120 times. A lower price means you can buy more silver with the same amount of money, naturally amplifying percentage gains. When gold rises by 10%, silver often increases by 15-20%, which is why professional investors say silver’s “catch-up effect” is strong.

Volatility Is a Double-Edged Sword

Silver prices are far more volatile than gold. During bullish trends, profit multiples can be 1.5 to even 2 times that of gold, but risks also increase accordingly. This makes it especially suitable for investors who can tolerate short-term fluctuations and understand risk management.

Why Silver Will Skyrocket in 2025?

Silver performance has been mediocre over the past two years, hovering around $22-26 per ounce. The turning point came in the second half of 2024—expectations of US rate cuts increased, geopolitical risks rose, and safe-haven buying surged, causing silver prices to rebound.

Three Major Catalysts Driving the Rally

In Q1 2025, the US dollar weakened, and the US officially entered a rate-cutting cycle. The electronics industry recovered, solar and electric vehicle capacities were unleashed, and demand for silver in AI chip packaging surged. Meanwhile, copper prices hit record highs, reflecting tight supply in the entire metal supply chain, pushing silver’s value higher.

Currently, silver has broken through $65 per ounce, reaching a ten-year high. Since the beginning of the year, it has surged over 120%, far ahead of gold (about 60%) and most commodities. The gold-silver ratio quickly contracted from a high of 80:1 to 66:1, further indicating room for silver’s catch-up.

Long-Term Supply Constraints

The silver market has experienced a supply deficit for five consecutive years, with a cumulative shortfall of over 800 million ounces. Slowing mine production and declining inventories provide strong upward momentum for futures and spot silver. This structural shortage is difficult to resolve in the short term, offering support for long-term investors.

Hedge Asset Upgrading

Many governments have included silver on critical mineral lists, upgrading its safe-haven attribute from merely inflation resistance to geopolitical risk hedge. As global economic uncertainties rise, investors flock to precious metals markets for safety, with ETFs and physical silver demand remaining strong.

Five Ways to Buy Silver: Choosing the Right Tool for Greater Efficiency

To participate in silver investment, there are multiple paths, each with pros and cons:

Method 1: Physical Silver — The Most Traditional but Least Recommended

Silver bars, coins, jewelry are accessible to everyone and feel tangible. However, from an investment perspective, physical silver has three fatal flaws: large buy-sell spreads, difficulty in liquidation, and storage hassles. For short- to medium-term investing, physical silver can eat up half of your profits.

Method 2: Silver Certificates — Bank Custody but High Cost

Opening a silver account at a bank, with the bank holding the silver for you, offers security. The downside is high transaction costs, only long positions, and slow liquidity. Suitable for highly conservative investors planning long-term holdings.

Method 3: Silver Stocks and ETFs — Good Liquidity but Weak Leverage

Investing in silver-related stocks (like Pan American Silver) or silver ETFs (like SLV) offers low transaction costs, high liquidity, and easier risk control. However, due to lack of leverage and inability to short, returns are limited. Ideal for steady, long-term investors.

Method 4: Silver Futures — Mainstream for Institutions, Active Trading

CME’s silver futures (SI) are the most popular global trading instruments, with daily volumes in the hundreds of thousands of contracts. Trading hours extend up to 23 hours, offering flexibility for long and short positions, low costs, and high liquidity. However, attention is needed for expiry and rollover requirements, making it suitable for short- to medium-term speculators and professional traders.

Method 5: Silver CFDs — The Most Flexible Leverage Tool

CFDs operate on similar principles to futures, allowing margin trading, both long and short positions, with higher leverage. CFDs do not have settlement dates like futures, offering more flexibility in holding positions. Platforms usually include stop-loss, take-profit, and trailing stop features for risk management. Overnight costs depend on position direction and platform settings. Liquidity is slightly lower than futures but still acceptable. CFDs are especially suitable for small investors with limited capital who want to participate in swing trading.

Practical Paths to Leverage Small Capital for Big Gains

If you only have a few thousand dollars but want to seize swing opportunities in silver, these tips can help:

Choose Leverage Carefully to Control Risks

Silver CFDs are ideal for small trades; recommend leverage not exceeding 5x. For example:

Suppose silver is at $65/oz, and you open a 0.1 lot (500 oz) position with 1:100 leverage, requiring only about $65.

• Without leverage: need $6,500; if silver rises to $68, profit is $1,500, a 23% return
• With 100x leverage: only $65 needed; same rise yields $1,500 profit, a 2300% return

Conversely, if silver drops to $63 (stop-loss level), losses are magnified. That’s why risk control is crucial—better to earn less than to lose everything in one shot.

Use Technical Indicators as Entry References

Monitor RSI and MACD for turning points. When RSI exceeds 70, consider profit-taking; below 30, a rebound may occur. Combining candlestick patterns and support/resistance levels improves success rates.

Gold-Silver Ratio as Your Compass

Historically, the gold-silver ratio fluctuates between 50-80. When it exceeds 100, silver is severely undervalued, presenting a buying opportunity. Conversely, when it’s low, consider caution. Keep an eye on gold trends, as gold often leads silver.

When Is the Best Time to Trade?

Silver markets operate 24 hours, but trading hours and volume vary greatly.

Optimal Trading Window: 8 PM to 2 AM Taiwan Time

During this period, European and American markets overlap, resulting in the most volatile, clearest signals, and highest trading volume. Short-term traders should seize this golden window.

Other times have lower liquidity, wider spreads, and are less ideal for entry.

Keys to Success or Failure in Silver Investment

Does silver really outperform gold in percentage gains? The answer: Possibly, but with higher risks.

Because of its low base, wide applications, and market sentiment sensitivity, silver often experiences large swings in a short time. For investors who can time the market and use proper tools, it’s a golden opportunity; for those rushing in or with loose risk controls, it’s a trap.

The key isn’t how much money you have but whether you know how to make your money work effectively. Setting stop-losses, choosing appropriate leverage, observing key indicators, waiting for the best moments—these simple disciplines often determine ultimate profits or losses. Buying silver requires wisdom and patience.