Silver Investment Guide: Why Do Professional Traders Favor Silver Over Gold? 5 Tips for Doubling Small Capital Strategies

Why Silver Is Becoming the Next Hot Topic? The Truth Behind Gold Losing Its Shine

When it comes to precious metal investments, most people’s first reaction is gold. But this year’s market trend is quietly shifting—silver is staging a comeback.

Many investors still hold the belief that “silver is cheap, gold is more valuable.” Little do they know, it’s precisely this affordability that makes silver the best choice for amplifying capital effects. But the logic behind silver’s potential to outperform gold lies in three key areas:

First, industrial use determines long-term demand

Gold is mainly a safe-haven asset with relatively single-purpose use. Silver, on the other hand, is the lifeblood of industry. Solar panels, electric vehicle batteries, 5G base stations, AI data centers—these future industries all rely heavily on silver. By 2025, the global green energy transition accelerates, and the demand for silver in electronics alone is expected to grow over 20% annually, transforming silver into a “growth-oriented industrial metal.”

In contrast, gold’s demand curve is flat; silver’s demand curve is rising. It’s clear which has more room to grow.

Second, the price base and upward space are inversely related

Data from the Chicago Mercantile Exchange shows that the gold-to-silver price ratio has historically fluctuated between 30:1 and 120:1. This means, with the same amount of capital, you can buy much more silver than gold. When market sentiment shifts toward precious metals, silver’s price often rises 1.5 to 2 times more than gold.

Third, the rebound effect presents opportunities

Historical trends show that the long-term correlation coefficient between gold and silver ranges from 0.4 to 0.8, but silver reacts more sensitively to risk aversion and exhibits greater volatility. When the gold-silver ratio drops from high levels above (80), it often signals a strong rebound in silver. This year’s rally is a typical example—silver surged over 120% from its early-year lows, far surpassing gold’s 60% increase.

Four Major Drivers for Silver Price Surge in 2025

Silver has surged to $65 per ounce, hitting a ten-year high, with an increase of over 120% since the start of the year. This is no coincidence; four forces are driving this momentum:

Force 1: Rigid demand from global industrial recovery

The US has officially cut interest rates, the dollar has weakened, and the global electronics industry is restarting. Especially with new AI chip packaging technology, silver usage in these chips has increased by about 20% compared to traditional chips. Coupled with large-scale deployment of solar panels and electric vehicle batteries, silver supply cannot keep pace with demand growth. Statistics show that the silver market has experienced a supply deficit for five consecutive years, totaling over 800 million ounces. When supply cannot meet demand, prices naturally rise.

Force 2: Continued tight supply

Mining growth has slowed, inventories are decreasing, and silver has become a scarce resource. Several countries will list silver as a critical mineral in 2025, giving it strategic importance. This elevates silver from a commodity to a geopolitical risk hedge. The supply gap provides strong upward momentum for futures prices.

Force 3: Convergence of gold-silver ratio driving rebound

When gold prices hit new highs, the gold-silver ratio quickly converges from above (80) toward 60:1 or even lower. Historically, this has been a signal for silver bull markets. According to Bank of America’s forecast, the target price for silver in 2026 is set at $65 (average $56), with optimists expecting even higher. The ratio remains within a reasonable range, and the market generally believes silver still has room for rebound.

Force 4: Inflow of risk-averse capital

Rising global economic uncertainty and geopolitical risks have led traditional safe-haven funds to flow into precious metals. Silver’s safe-haven attribute has evolved from simply fighting inflation to also hedging against supply chain risks. Strong ETF inflows and physical buying further push up silver prices.

It’s important to note that silver prices are volatile, and corrections after rises are normal. Bank of America estimates a possible retest of support levels at $60 or $55, so risk management should not be overlooked.

Five Ways to Invest in Silver: Balancing Risks and Returns

Silver investment is not limited to just one approach. Depending on your risk tolerance and trading cycle, you can choose from different tools:

Method 1: Physical silver (silver bars, coins, jewelry)

This is the most traditional and straightforward method. Buy physical silver and hold it directly. Advantages include low entry barriers, no technical complexity, and silver’s affordability. Disadvantages are high transaction costs (wide spreads), the need for self-storage, poor liquidity, and difficulty in cashing out.

Investment assessment: Suitable for long-term asset allocation; not ideal for short-term trading. If purely for investment appreciation, physical silver may not be the best choice.

Method 2: Silver certificates

Held in bank custody; you only need to open an account at a bank to purchase. Many banks in Taiwan (like Bank of Taiwan, Yuanta Bank) offer this service. Transaction costs are relatively low, and no self-storage is required. Downsides include slow transaction speed (in-person processing), no interest accrual, and only one-way trading.

Investment assessment: Suitable for small, long-term dollar-cost averaging investors; not for short-term trading.

Method 3: Silver stocks and ETFs

Invest in listed companies related to silver (e.g., Pan American Silver PAAS) or silver ETFs (e.g., SLV) via stock markets. Benefits include low trading costs, good liquidity, and convenience. Drawbacks are limited leverage, only bullish exposure, and no short-selling.

Investment assessment: Suitable for conservative investors wanting exposure to silver’s rise with limited risk appetite.

Method 4: Silver futures

The CME’s silver futures( code SI) is mainstream. Daily trading volume reaches hundreds of thousands of contracts, with ample liquidity. Trading hours extend up to 23 hours, nearly around the clock. Supports both long and short positions, with adjustable leverage. Downsides include delivery date restrictions, monthly rollover requirements, and higher capital risk.

Investment assessment: Suitable for short- to medium-term speculators with some futures trading experience.

Method 5: Silver Contracts for Difference (CFD)(

Similar to futures margin trading but more flexible. Silver CFDs have no delivery date, no rollover requirements, higher leverage, and more operational flexibility. Platforms often provide stop-loss, take-profit, and trailing stop tools. Disadvantages include overnight holding costs, potentially less liquidity than futures, and regulatory risks.

Investment assessment: Suitable for short-term high-leverage traders with strong risk awareness and disciplined trading.

How Small Investors Can Leverage CFD to Capture Big Moves?

If your capital is limited but you want to seize swing opportunities, silver CFDs are a popular choice. Here’s an example to illustrate the trading logic:

Preparation before trading

Set parameters based on your risk preference:

• Entry direction (limit or market order)
• Contract size
• Leverage multiple (recommend no more than 5x)
• Stop-loss price
• Take-profit price
• Trailing stop settings

Choosing the trading direction

• Bullish on silver: Buy XAGUSD to open a “long” position
• Bearish on silver: Sell XAGUSD to open a “short” position

Example analysis (as of December 19, 2025, silver price around $65.40/oz)

Suppose you enter at $65.00, using 100x leverage to trade 0.1 lot (about 500 ounces):

Without leverage, you need about $6,500; with CFD leverage, only $65.

A few days later, silver rises to $68.00; you close the position. Both ways, the profit difference is $1,500.

The difference lies in return on investment—about 23% without leverage, about 2,300% with CFD leverage.

But leverage also amplifies losses. If silver drops to $63.00 and hits your stop-loss, the loss is about $1,000 both ways, but the capital impact differs greatly.

Timing and Entry Techniques

Silver trading is not suitable at all times. Timing your entries can improve success rates:

Best trading hours

In Taiwan time)GMT+8, 8 PM to 2 AM is the golden window for silver trading. During this period, European and American markets overlap, resulting in maximum volatility, clearest signals, and highest volume—ideal for short-term trades.

Direction judgment tips

• Observe leading signals from gold: The gold-silver ratio usually moves in sync, with gold leading silver.
• Combine technical analysis: RSI, MACD, along with USD index and interest rate policy changes.
• Use the gold-silver ratio as an entry basis: Historically, the ratio fluctuates between 50-80; when it exceeds 100, silver is relatively undervalued, offering a good entry point.
• Monitor market sentiment shifts: When risk appetite shifts from risk aversion to risk-taking, silver’s role changes from defensive to offensive asset, requiring strategic adjustment.

Final Words: Small Money Can Grow Big

Is silver really more likely to rise than gold? The answer isn’t absolute, but under certain conditions, it’s true.

Because of its low base, industrial applications, and market volatility, silver has more frequent opportunities for rapid gains. For small investors, instead of waiting for gold to appreciate, it’s better to use the right tools and seize the timing to operate in silver.

Leverage tools like CFDs and futures are inherently risky but can magnify capital effects. The key isn’t how much money you have, but whether you understand the market, manage risks, and maintain discipline.

Remember: Opportunities always favor those who are prepared.