Investing in Silver Australia – How to Invest in Silver 2021

Fact Checked by Gary McFarlane

Investors have always been seeking various alternatives to invest their money. An alternative way of investment compared to the standard financial instruments like stocks and bonds are commodities. Silver is one such example under the precious metal commodities category along with gold,  palladium and platinum. Silver is mined to a great extent in Australia. As the country holds one of the highest silver reserves in the world, it is no wonder Australians also have a keen interest in investing in silver. Let us explore how you can invest in this precious metal and the financial implications it would bring.

In this tutorial, we have thoroughly researched some of the aspects of investing in silver in Australia. We’re hoping this curated guide to investing in silver can provide you with practical information regarding the advantages and risks of investing in silver as well as which brokers might be suitable to take speculative action based on silver related assets.

Table of Contents

#1 Broker for Investing in Silver in Australia – eToro

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$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

How to Invest in Silver in Australia – Step by Step Guide 2021

Choosing the right platform has great importance in trading success. Trading tools, user interface, learning resources and other interactive options can make or break successful deals. We recommend eToro not only because they are doing a great job on those fronts but also they have implemented advanced security measures and pro-privacy technological improvements. You can get started with eToro in less than 5 minutes by following these steps and start investing in silver thereafter.

  • Step 1: Open an eToro account: First thing first, you will need to sign up for an eToro account. To get started with eToro just type “eToro.com” into your browser, press the “Join Now” button, and fill in the required details.
  • Step 2: Verify your Identity: The verification process is rather simple. Just provide a photo ID (passport, driving licence) and proof of address (utility bill, bank statement) during the verification process through the web or mobile app.
  • Step 3: Fund your account: Click on “Deposit Funds”, enter whichever amount you’d like to invest in silver or other assets and press “Deposit”.
  • Step 4: Invest in Silver: Type the name of a silver ETF, share or a silver CFD contract or make a generic query such as “Silver” into the search bar, press “Trade”, enter however much you’d like to invest, and press “Buy” to buy directly silver related contracts. 

Where to Invest in Silver – Choose a Broker Australia

Today we have a plethora of possibilities, technologies, platforms and insights. It can be very useful but too many options can also be overwhelming and paralyze investors. We created an extended review about top brokerage platforms where you can trade silver and silver related financial instruments explained in this article. If you don’t have extensive knowledge about this precious metal, you can also use learning resources and analysis tools provided by your broker.

As an established online broker that works well and has a great company history, eToro is one of our top recommendations when it comes to new traders considering to discover and trade silver related financial instruments in Australia. Here are 3 online-brokerage firms worth considering for signing up and starting to trade silver.

1. eToro – Best Overall Way to Invest in Silver in Australia

 

eToro is an accomplished online broker which was founded in 2007 as an Israeli company. The company serves millions of traders, provides high quality customer support and offers a wide range of financial instruments for trading through CFD contracts. Investors and traders can pick various assets among Stocks trading, Exchange Traded Funds (ETF) trading, Indices trading, Commodities trading, Forex trading, CFDs trading, Social trading, and recently added Cryptocurrency trading. When it comes to trading silver, eToro offers many different assets under various financial asset classes.

We also like eToro’s trading platforms and software which are available on website as well as mobile operating systems. Coupled with carefully created learning resources, eToro becomes a hub that serves beginners as well as advanced traders. Finally the company is known to have pioneered social trading feature and this is a very popular feature of eToro. Furthermore, creating accounts on the online broker is very easy and depositing money is also commission-free.

Security & Privacy

In Australia, eToro and/or its subsidiaries are regulated by the Australian Securities and Investment Commission (ASIC). Additionally, The Financial Conduct Authority (FCA) regulates eToro in the United Kingdom, while the Cyprus Securities and Exchange Commission regulated it through the Cypriot unit (CySEC). Client funds are also stored in regulated and registered US banks which provide extended fund security as US banks are covered with Federal Deposit Insurance Corporation (FDIC) up to $250,000.

Additionally, technologies such as 2FA and SSL are successfully implemented to the platform and while former makes accounts more secure and less prone to hacking, latter ensures the user data resulting from traders’ interactions with the platform stay private. Thanks to these security and privacy measures, eToro is seemingly a very safe and secure online brokerage platform.

Fees & Features

eToro doesn’t have a confusing fee structure and everything seems pretty straightforward. The company doesn’t charge trading fees and instead makes its profits through the spread every financial asset buy / sell order incurs. Users can make deposits commission-free on the platform through a number of convenient methods such as debit/credit cards, bank transfers, Paypal and even Skrill. Withdrawals are subject to a fee of $5 on the platform which is probably not a concerning amount for any serious investor.

eToro has a well-built mobile app in addition to the web-based trading platform and software. While beginner-users can benefit from rich financial trading related learning resources, advanced-users can still enjoy sophisticated research and insight tools. eToro’s charting tools also work well and provide a powerful environment for users who are keen on technical analysis. We found the selection of assets offered on the platform to be satisfactory and currently 32 commodities and 256 ETFs trade on the platform in addition to 2593 stocks representing company shares.

eToro Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee $5
Inactivity Fee £10 (Monthly)

 

Pros

  • Great web-based software – including on the mobile app.
  • Deposits are commission-free
  • Trading related learning resources are second to none
  • Strong customer service
  • Well-established operations and millions of satisfied clients since 2007.

Cons

  • There is a $200 minimum deposit amount
  • In some cases, you might be required to pay a $5 withdrawal fee

67% of retail investor accounts lose money when trading CFDs with this provider.

2. XM – Best Platform for Customer Service to Invest in Silver in Australia

If you want to start small with as low as a meagre investment of $5 to get the hang of the precious metal commodity market, XM Group will be a suitable brokerage solution for this purpose. In 2009, XM Group was founded and is still being regulated by tier-1 regulatory bodies. While XM Group falls short of industry leaders with regards to software quality, market coverage, customer support and pricing, the company excels in providing high-quality educational content and market analysis with a very low barrier for entry.

Security & Privacy

The XM Group is a medium-risk online brokerage. The company is not publicly traded and they don’t operate a bank. Two tier-1 regulators (high trust), one tier-2 regulator (medium trust), and one tier-3 regulator (low trust) have approved XM Group. Therefore, it is secure to trade using XM Group.

XM brokerage platform luckily offers 2FA and by enabling it you can add a security layer to your login security. It can be activated by SMS verification and you will simply need to verify your account using the code received via SMS on your mobile number. Additionally, a market standard secure socket layer (SSL) also encrypts user data making interactions more private to the 3rd-party observers.

Fees & Features

XM trading fees are mostly on the modest side. XM offers a variety of account choices, each with different pricing. Spreads are higher on the Standard, Micro, and Ultra-Low accounts, but there is no commission. Then there is the XM Zero account which has smaller spreads but it comes with a trading commission attached to the orders. After one year of inactivity, there is a $15 one-time maintenance fee, followed by a $5 monthly fee if the account continues to remain inactive. This fee is not too much but it could definitely be a bit lower. Minimum $5 deposit is probably one of the lowest in the industry and offers a very low entry barrier for small players. We like XM Trading for this feature in addition to the well-prepared learning material they offer for free.

The details of the fees charged by XM are given below.

XM Network Fees

Fee Type Amount
Commission 0% or varying fees for XM Zero accounts
Withdrawal Fee $0
Deposit Fee $0
Inactivity Fee $15 one time $5 per month (after 12 months inactivity)

 

Pros

  • Low CFD fees in general
  • Great educational resources
  • The minimum deposit limit of $5 is hard to beat

Cons

  • Limited product portfolio in some cases
  • Inactivity fees are complicated and on the high side
  • No investor protection for non-EU investors/traders

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Avatrade – Best Platform for Asset Selection to Invest in Silver in Australia

A popular choice for providing an extensive selection of financial instruments is AvaTrade. It is one of the most trusted online brokers worldwide and Australian traders can also benefit from this option as well. The company was founded in 2006, and since then has acquired over 300,000 clients from across the globe.

According to ForexBrokers review, AvaTrade’s strength lies in mirror trading techniques, educational resources, and being up to date with the industry practices in general. From Forex to CFD, stocks to commodities, Avatrade deals in a variety of primary financial instruments.

Security & Privacy

AvaTrade receives authorization from highly significant regulators. These regulators include the Australian Securities & Investment Commission (ASIC), the Investment Industry Regulatory Organization of Canada (IIROC), and the Japanese Financial Services Authority (JFSA). The company received a total score of 93 out of a possible 99 on the parameters of trust which is one of the highest scores we have come across while reviewing online brokerage firms. The company highly prioritizes the security of clients’ funds as well as website and software data shared before, during and after trading activities.

Fees & Features

There are no deposit fees charged by AvaTrade, although a minimum amount of $100 is required to open an account. The company also does not charge any commission fees nor withdrawal fees. The inactivity fee, however, is a bit high. $50 per quarter is charged after only three months of not being active on the account which might be a deal-breaker for some investors who enjoy taking breaks from trading every now and then.

AvaTrade Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $50 per quarter (after inactivity of 3 months)

 

Pros

  • Easy account setup
  • No-commission accounts
  • No deposit fees
  • No withdrawal fees
  • Quality educational tools
  • Fully regulated by authorities
  • Diversified CFD products

Cons

  • High fees of inactivity only after 3-months of inactivity
  • CFD spreads can be high
  • US clients not allowed

67% of retail investor accounts lose money when trading CFDs with this provider.

Invest in Silver in Australia – Broker Price Comparison

It can be stressful to navigate through all the online brokerage platforms available and pick one that suits your needs the best. For that reason, we created this thorough comparison table and well-researched review. Below you can see how eToro, XM Trading and AvaTrade fare against each other with regards to their fee structures.

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% £0 £5 £10 monthly (after 12 months inactivity)
XM 0% $0 $3 $15 + $5 monthly (after 12 months inactivity)
AvaTrade 0% $0 $0 $50 (after 3 months inactivity)

What are the Different Ways to Invest in Silver in Australia?

There are many different ways to speculate on silver prices, trade silver assets or invest in the silver long term. In this section, we will discuss how traders and investors in Australia can gain exposure to silver and silver related assets. Different financial instruments can offer different values so it’s great to be aware of their existence and harness their power when it’s suitable for your investment portfolio or trading strategy. In general, we can probably categorize trading silver into two groups. Silver can be bought as a physical metal or it can also be bought indirectly through more complex financial assets or other financial assets that are exposed to silver in their portfolios and/or balance sheets. These can be mining company shares, ETFs, futures, derivatives and numerous CFDs. Here is a detailed list of some of those silver related financial assets and how they might work.

Physical Silver

The traditional approach to investing in silver would be to buy physical silver. It could be in any shape such as coins, plates, jewellery, or bullions. The most popular physical type of silver that investors go for is coins. Similar to coins, silver rounds with varied designs are also one of the prime choices. On the other hand, investors who would like to go for a less costly way of investing in silver by eliminating design costs would likely proceed with bars. Although some investors might like the idea, storing silver in a safe and secure manner can be a huge responsibility and it can be annoying for most investors in long term.

Silver CFDs (Contract for Difference)

A modern way of trading in the silver market is with the help of Contract for Difference (CFD). This special financial derivative allows its owners to speculate on the price of a particular financial instrument and obtain either a long position or a short position based on price direction and predictions. So, even if a trader expected the price of silver to fall, he can still enter a short position and make the bank that way. Through CFDs, one can benefit from speculating and investing in silver without owning the metal. This method is commonly offered by online brokers such as eToro and can be very convenient for some investors and traders.

Silver Mining Stocks

Another unique approach of indirectly investing in silver is buying shares of companies involved with this metal. These companies may be engaged in the mining or exploration of silver, or they may be holding the metal in their balance sheets for various reasons. Some of these companies may also be involved with metals other than silver as well. These stocks are listed like any other stock on the stock exchange, and an investor can invest in their preferred stock after carrying out ample due diligence and analysis or with the help of a professional broker.

Silver ETFs (Exchange-Traded Fund)

A silver Exchange-Traded Fund (ETF) is like any other ETF except it would be significantly exposed to silver prices. Instead of tracking the prices of a particular stock or index, a silver ETF specifically might track the price of the silver. Additionally, an ETF can be made of various commodities, precious metals or company shares related to silver. A silver ETF thus can provide exposure to silver and can be very useful to build sophisticated strategies related to silver investing. Since Australia is home to massive silver mining activity and silver reserves, it can be quite convenient to discover silver related ETFs originating from this region as well. A silver ETF helps diversify the risks as well as provide exposure to the silver market.

Best Ways to Invest in Silver – Australia

The silver market in Australia is well-established and silver prices have been on the rise globally for the past couple of decades. The Silver Institute lists Australia as one of the top 5 countries for silver mining, with over 44 million ounces of silver being produced each year. Here are a few ways why you might want to take advantage of investing in this potentially promising commodity.

Invest in Silver – Physical Precious Metal

If you would like to invest directly in a commodity in its physical form, purchasing bullion, coins or plates may be the obvious choice for investors. Owning silver in its physical form provides direct ownership and control over the investment and can be perceived as the most secure method to invest in silver by some investors. However, storage issues, legal complications, environmental sensitivity, theft and robbery risks as well as counterfeit risks can be pretty serious challenges for anyone who is determined to go the physical investment route. Several different companies or platforms deal with commodities like gold and silver along with the products made from them. The Perth Mint is one such Australian enterprise that can help you can get your hands on premium precious metal products. Having said that, investing in actual physical commodities is not a very popular practice among regular investors.

Invest in Silver – Silver CFDs

If you do not wish to possess the precious metal in its physical form, a silver CFD may be an excellent option for you. CFDs allow traders and investors to speculate over the price of silver. The price difference at the start of the contract and the end determines the returns. Several reliable and regulated CFD brokers can assist you with silver related CFDs. eToro, Avatrade, and XM Trade are some of the renowned brokers that are available in Australia and deal with CFDs.

Invest in Silver – Silver Mining Stocks

If you are an investor who prefers investing in the stock market through company shares or stock CFDs, you might prefer to gain silver exposure through silver mining companies. These companies usually have shares that are closely correlated with silver since they hold rights for silver mining or carry silver assets in their balance sheets. For investors who would like to invest in shares as well as silver, buying shares for companies that are mining silver can be a great idea. A recent survey by Research and Markets indicates the worldwide silver demand is expected to reach 1,155 million ounces by 2025. A CAGR of almost 3% which very consistent and solid. A few prime silver stocks listed on the Australian Stock Exchange (ASX) which silver investors can consider are Silver Mines, Adriatic Metals, BHP Group, Investigator Resources, and White Rock Minerals.

Invest in Silver – Silver ETFs

If you wish to increase your exposure to the silver market, you can opt in to invest in a silver ETF. Like futures contracts or shares, an ETF is also listed on the exchange and might require a broker to facilitate buy and sell orders. An ETF reduces the risk for losses by providing instant diversification of the portfolio. ETFS Physical Silver ETF (ETPMAG) is one type of ETF traded in Australia that tracks the price of real silver. In addition to ETFs that are backed fully and solely by silver, you can also invest in more diversified ETFs such as precious metal ETFs, commodity ETFs or mining industry ETFs. This kind of flexibility can help investors achieve more advanced strategies and risk management practices in an affordable and simplistic manner.

Is Silver a Good Investment?

Silver is a major precious metal commodity that attracts many investors for speculative and investment reasons every day. Although it is less popular as an investment instrument compared to its precious metal cousin gold, silver still boasts a staggering $1.3 trillion market capitalization today. (Same value for gold is $11.3 trillion, almost 9 times higher than silver.) However, certain highlighting features still exist for this precious metal which can sometimes be a lucrative commodity for investment purposes. Here are a few potential advantages of investing in silver.

Global Scarcity

Actual silver, a physical commodity, is ultimately a finite element that can be mined on Earth to a limited degree. This limited nature creates scarcity and pressures on the supply aspect of silver which can make the precious metal more valuable. Like other precious metals, the silver market has a stable growth pattern and is usually considered a safe form of investment and especially thrived in unstable times historically. Silver is also used to hedge against inflation when the currency value decreases and such characteristics of silver create a demand pressure further making silver a valuable asset.

Historical Prestige

Silver as a commodity is well established and has been growing in demand. This metal is highly versatile and is being used by several fields across industries. According to GoldBroker, silver is the second most sought and consumed commodity globally. The majority of the silver is being used in industries such as electronics, tableware, jewellery, photography, etc. Even in ancient times, silver has been used as a precious metal for jewellery, tools and household items as a symbol of prestige. Although times change, old habits don’t die very easily and silver remains a long-standing precious metal that has proven itself historically.

Unique Portfolio Diversifier

Investing in commodities like gold and silver can be a unique way of providing much-needed diversification to your portfolio. There are always various risks involved in the markets. A company can go bankrupt due to bad management practices. Countries can perform badly too, due to corruption or wrong long-term policies. Tech markets and real estate are prone to bubbles and go bust every now and then. A commodity like silver usually rises to the challenge when a lot of things are going badly in the economy. In situations like these, investors who haven’t diversified their portfolios well might experience an immense financial setback. In contrast, investors who have correct risk management practices will likely be less affected as some of their assets will perform well and offset some of those losses.

No Technical Complications

Investing in silver is considered less risky in some aspects than investing in some financial instruments such as stocks or options or crypto assets. It is especially true when one’s preferred investing approach is by purchasing the metal in its physical form. There is no threat of the risks associated with other investments such as breach of data, increased rate of frauds, lack of regulation, hacking or other technical complications when it comes to investing in silver. This simplicity can allure some investors as to when things get too complex, the probability of something going wrong in the long-term also increases greatly.

Investing in Silver – What are the Risks?

Each investment comes with its own set of risks. These risks can be specific to the item itself or related to the overall market conditions. Therefore, it is crucial to explore these risks before making an investment decision. Following are a few of the significant risks associated with investing in silver.

Potential Fall in Demand

Although the demand for silver has been increasing steadily, there is still a potential risk for it to fall in the future. It could further reduce the value of silver itself and make it less valuable in the eyes of the investors. Historically, silver was once competing with other precious metals like gold but this is not the case anymore although nothing really changed regarding the physical characteristics of these commodities or elements. Similarly, fashion trends, jewellery perceptions and social constructs can change making valuable things less valuable in the future. Therefore, silver might be considered an attractive investment in the market today and have a different position in the markets of tomorrow.

Risk of Storage & Other Counterparty Risks

There is a risk of theft or damage when it comes to storing physical commodities and this includes silver. Even if an investor has chosen not to invest directly in silver in its tangible form, there is a counterparty risk involved. It means when it comes to investing in the shares of a silver mining company or silver ETFs; there is a similar possibility for the underlying silver asset not being protected or stored well or the institution going bankrupt and defaulting on its obligations. Thus all parties with a stake can be affected when these kinds of events happen and this includes the investors.

Liquidity Risks

Like any other precious metal, real silver is usually considered a liquid investment compared to art or shares of a small company. It is easier and quicker to convert silver into money and this can usually be done in high amounts as well. However, more effort and time might be required with silver if a scandal or financial crisis occurs. A bad event could cause inspections and verifications to be reconsidered and selling silver can become a difficult endeavour due to dried liquidity. Additionally gold, in comparison, is considered to be a more liquid form of investment than silver. Therefore, the overall liquidity of silver can be sensitive at times, thus making it a little riskier than some other assets.

How to Invest in Silver in Australia with eToro

eToro is a very powerful online brokerage platform that’s been serving clients for 14 years. Account sign up process is surprisingly simple and Australian traders can take advantage of many features and commission free trading this brokerage solution offers. Here are the steps to have an active trading account with eToro.

Step 1: Open an account with eToro

Signing up takes only a couple of minutes and it’s also free to create accounts on this platform. Once users sign up using an email, they can start taking advantage of rich trading and investment related resources and check out the famous feature of eToro, social trading. Just type “eToro.com” into your browser, press “Join Now” and fill in the necessary details.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

Once you have an eToro account, you will likely want to get it verified so it’s ready to buy and sell financial instruments. Verification can be completed in a matter of minutes and to start the verification process you need to upload proof of identity (POI) and proof of address (POA). Simply, provide a photo ID (passport, driving licence) and bank statement or utility bill for proof of address and your account should be verified in around 15 minutes.

Step 3: Fund your account

Once your account is verified it will be ready to be used in buying and selling assets such as silver contracts on the platform. However, to initiate trades you will need to have deposited fiat money on your account. Funds can be deposited commission-free on eToro and this brokerage solution offers quite a few ways to make deposits such as bank transfers, debit/credit cards, Paypal and Skrill. To proceed with depositing money just choose your deposit method and click on “Deposit Funds” and enter the amount you want to deposit. Then press “Deposit” and your funds will be transferred. eToro offers are credit/debit cards, e-wallet (PayPal, Skrill, etc), and bank transfer which is very convenient.

Step 4: Invest in Silver!

Once you have money deposited to your verified eToro account, you can actually start buying and selling financial assets including silver contracts, silver related company shares and ETFs. To start trading, just type the name of the asset such as “Silver” into the eToro search bar, press “Trade” and proceed with the amount you’d like to invest by pressing “Buy”. Congratulations you have just invested in silver!

Conclusion

Unlike other investments, silver is a commodity that holds an intrinsic value. Although it does not fall under the category of money, physical silver is a real asset equivalent to money. Investors have shown a keen interest in silver because it offers a substantial amount of returns. Whether to invest in silver or not greatly depends on the buying behaviour of the investor and the current market situation, and the decision should be made while keeping the benefits and risks in mind.

Company history, ease of account setup, minimum deposit requirements, low commission rates, and non-trading fees are all examples of factors that influence broker decisions and by choosing a high performing brokerage solution you can allocate more of your time to analyze shares to invest in.

#1 Broker for Investing in Silver in Australia – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

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About Umut Sagir PRO INVESTOR

Finance and Tech professional. Founder of HolyPython.com. In recent years, Umut helped reputable clients such as MasterCard New York HQ, Deutsche Bank, FluidAI, Danske Commodities, EvoShave and others with cutting-edge technology implementations and financial research.