Trading Essentials
How Silver Trading In Forex Can Benefit Your Assets?
7 min read

In the Forex market, in addition to currency pairs, precious metals are also one of the highly profitable and safe choices if you trade well.

Silver is a precious metal that has been used as a currency for thousands of years. Silver trading is a popular investment option in the forex market, where it is traded alongside other commodities such as gold, oil, and copper. With Forex, it is paired with one currency, usually USD.

In this article, you will share with FXCE the knowledge of silver trading in Forex, its advantages and disadvantages, and other necessary information about trading with this asset.


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Silver Trading In Forex?

As the market strikes the difference between the exchange rates, it will be an investment opportunity for those involved, the basic currency in that pair will rise against the valuation currency, you will gain profit if you buy and lose money if you sell. Not only money pairs, but valuable goods such as gold, silver, and oil are also traded.

Silver in the investment finance market is one of the popular commodities with investment funds. In the Forex market, in particular, silver is considered a commodity that can be traded due to its reserve and standard with gold money.

The silver code in Forex for trading is XAG/USD. When silver is given a trading code, this is when the silver code in Forex is written in the form of a pair of currencies, where XAG represents silver and USD represents US dollars:

  • When buying XAG/USD, Trader was buying silver and selling USD.

  • When selling XAG/USD, Trader is selling silver and buying USD.

Basic steps for silver trading seemingly: 

  1. Create a trading account

  2. Choose which underlying silver market you want to trade

  3. Open your first position

  4. Monitor your trade using technical and fundamental analysis

Both Sides Of Silver Trading In Forex

The last few years have seen very high levels of volatility in silver prices, possibly pushing silver beyond the generally perceived limits for safe asset classes. However, a deep analysis of their pros and cons would help traders pretty much.


Liquidity is as high as currency pairs

Silver is also a product in the large foreign exchange market, so it is still very liquidity. Trading on exchanges also took place rapidly.

Have good profit potential

Because it is a niche market, despite no frequent fluctuations, silver is still considered one of the products with great potential for profitability due to rapid adjustments. Trader can take profits from these value changes through silver trading in Forex.

Suitable for portfolio diversification

You can completely distribute risk by investing in different currency pairs. This minimizes the risk for the entire investor when performing copytrade with the masters.


High risk if your analysis is not well 

As with any other investment activity, trading in Forex silver can also bring investment risk, especially if you are not familiar with the economic situation associated with silver.

Request a high leverage

As mentioned, silver trading in Forex does not change frequently but suddenly, so most of the time the tracker needs to put high leverage to bring good profit. This will be a double-edged sword when the risk of losing money increases.

Often lacking preference for gold

The information surrounding silver is not as dense as gold, so it is also harder to find information. The lack of preference for gold makes predicting the price of silver more likely to go wrong.

Factors Affecting Silver Trading

1. Dollar power

The first factor affecting the silver price in Forex is the USD exchange rate. The most common case is the inverse ratio of USD and XAG. The reason is that silver is also considered a kind of stored asset such as gold to prevent inflation and the depreciation of the dollar. Therefore, analysis of factors affecting USD will also guide the price of XAG.

2. Interest rate

One of the biggest factors affecting the value of USD should also have an indirect effect on female gamblers. Based on the FED's interest rate policy, Trader can determine how the value of USD and XAG will go.

Basically, the most visible process is: If interest rates fall; USD will decrease the exchange rate, silver will have a chance to rise. On the contrary, when the FED wants to raise the status of the Dollar, silver tends to go horizontal or downward.

3. Price of gold

Closely related, gold and silver prices are often considered safe products in the area of financial investment. As gold prices rise, silver prices may rise with (may be slower or faster depending on the time frame).

However, the Trader should also rely on volume factors to recognize where money is flowing because it is possible that when gold prices rise, investors turn to buying gold instead of silver, which leads to a fall in XAG prices. The relationship is not always the same, but if you look into it, it will be easy for the trader to recognize the actual needs.

4. Supply & Demand factors

Not only the need for investment, silver trading in Forex, silver prices are also affected by the purchase of physical silver reserves. On the supply side, study estimated and actual mine production, especially in major silver-producing countries. On the demand side, follow both the industrial demand and investment demand for silver. Factors such as:

  • Silver use problem: For jewelry, furniture, technology,...

  • Reserve problem: When there is not enough gold for central banks to reserve, silver will be a good temporary alternative.

  • Mining problem: The mining operation is stalled, and difficulties inevitably will cause the price of silver to rise a lot.

5. Inflation

Like all metals with value or assets, inflation is now the most interesting thing in many countries. As inflation rises, it increases goods, including silver. Accompanying inflation are new interest rate changes to adjust and support the economy.

6. Political situation

Last but not least, the overall situation of politics can affect silver trading in Forex through the following factors:

  • Foreign relations between countries: Demand for exchange, trade and silver reserves

  • Political upheaval: Election events, government changes, strikes, protests affecting silver prices and Forex in general

  • Global Economy: Manufacturing and Consumption Situation, Monetary Policies

Remember These Two To Have Smooth Orders

1. Do the silver trading in the prestigious Forex broker

Due to not fluctuating too strongly in the short term, the profitability of silver trading in Forex is also affected by overnight fees and exchange spread fees. Choose a vendor with good liquidity, prestige, and modern systems so that they don't deviate too much and don't lose money due to technical errors.

2. Thoroughly investigate the silver market 

It is necessary to understand the operating mechanism of the silver market, factors affecting silver prices, technical indicators, how to read charts, etc. help you make more accurate investment decisions.

In addition, to succeed in silver trading in Forex market, you need to constantly update market information and apply risk management methods to limit losses and protect your account. When entering an order, it is necessary to carefully calculate and make decisions based on various factors.


Silver has been a highly volatile commodity in recent years, making it a high-risk asset. Traders should be aware of this and keep sufficient capital allocated for it. These are the most comprehensive shares of investment and silver trading in Forex. Regardless of the choice of any product, always be careful and manage your capital as best you can to optimize profitability.

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