How to invest in silver in Malaysia

Buy shares in a silver company

One common way to invest in silver is over the stock market. When you buy shares in a silver mining (or related) company, you can typically expect your stock to rise in value as the price of silver increases.

Silver has a number of uses that make it a desirable asset in many modern industries. The main difference between investing in physical silver and stocks in the silver industry is you’re exposed to the same risks that come with buying into any company, such as bankruptcy. By that same token, there can be additional benefits such as dividends or potential higher returns.

In Malaysia, there are many listed companies with silver (and gold) exposure, including: Bahvest Resources Bhd (BAHVEST), Poh Kong Holdings Bhd (POHKONG), Tomei Consolidated Bhd (TOMEI) and Zhulian Corporation Bhd (ZHULIAN).

Invest in silver ETFs

Investing in a silver-themed exchange-traded fund (ETFs) can be an easy way of gaining exposure to silver prices or companies in the silver sector. ETFs are investment funds that trade on stock exchanges and track the prices of underlying assets.

Some silver ETFs simply track silver spot market prices, while others track a collection of companies in the silver mining industry or a combination of the two. This makes ETFs an easy and flexible way of adding silver to your portfolio.

At the time of writing, there’s no ETF available on Bursa Malaysia that tracks physical silver prices. However, if you have access to overseas markets such as the US market, you may be able to invest in silver ETFs like iShares Silver Trust (SLV) and Global X Silver Miners ETF (SIL).

Silver futures or options

By investing in silver futures you are agreeing to buy an asset at a future set price. In other words, you are agreeing to pay today’s prices for an asset that gets delivered sometime in the future.

If the price rises between the time the futures contract is purchased and the contract expiry date, buying at today’s prices will be a profitable trade. The difference between the price you paid for an asset and its price at the time of delivery is the profit.

This system also lets traders profit from falling prices. If a trader thinks prices will drop, they can also buy a “short contract.” This means they put in an order to sell the asset at today’s prices, for delivery in the future. Now, if prices drop between the time the short contract was purchased and the contract expiry date, the price difference will be the trader’s profit for the trader.

With traditional futures trading, you’re dealing with physical commodities. Typically only professional traders buy and sell contracts over the futures market.

Retail traders in Malaysia typically trade silver futures through contracts for difference (CFDs). CFDs are derivative investment products that allow you to trade on the future prices of underlying assets such as commodities, stocks and indices. Because they allow you to trade using borrowed funds (leverage) they can be highly risky and are only for more experienced traders. Learn more about CFD trading in the complete guide.

Silver bullion

Rather than investing in silver stocks, you may decide to invest in physical silver, in the form of silver bullion bars or coins, to sell on your own terms at a later date.

“Bullion” refers to high-purity silver that is officially recognised as being at least 99.5% pure silver. When buying silver bullion, it’s important to remember that you are purchasing by weight regardless of whether it’s in the form of a bar, a coin or anything else.

More collectible forms such as commemorative silver coins will often be much more expensive per gram than silver bars, so it’s important to check how much you’re paying by weight before buying silver.

While you have full control over the asset, buying physical silver is a longer term investment and you will have to find a buyer to realise a profit. Like other investments, physical silver prices are still influenced by the market.

It’s up to you to decide how you want to store physical silver. Some people keep it at home, others entrust it to a custodian. Both options have different costs and risks.

Compare online brokers to buy stocks and ETFs

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Name	Product	Interest on deposit?	Intraday trade	CDS fee
Zacks Trade		No	Yes	N/A	CFD Service. Your capital is at risk. The Zachs Trade platform offers stocks, ETFs, bonds, options, and more with access to more than 90 exchanges worldwide	Go to site More Info		loading Fetching your data...
Alliance Bank Trading Account		Yes	Yes	N/A	CFD Service. Your capital is at risk. Trade on-the-go and diversify your portfolio with a myriad of investment products, ranging from bonds to unit trusts.			loading Fetching your data...
CIMB Trading Account		Yes	Yes	RM0	CFD Service. Your capital is at risk. Access multiple stock exchanges,  exclusive research materials, real-time portfolio management, and other trading conveniences to grow your investments.			loading Fetching your data...
Hong Leong Trading Account		Yes	Yes	RM10	CFD Service. Your capital is at risk. Enjoy the flexibility of bursa trading and access global markets with a single platform.			loading Fetching your data...
Rakuten Trade Trading Account		Yes	Yes	Free	CFD Service. Your capital is at risk. Benefit from low fees and earn reward points when you trade on this all-in-one digital brokerage.			loading Fetching your data...
RHB Trading Account		Yes	Yes	RM10	CFD Service. Your capital is at risk. Trade in futures, shares, and warrants across major foreign markets with Malaysia's largest investment bank.			loading Fetching your data...

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How much is silver worth now?

Why do people invest in silver?

There are two main ways people think about silver’s value as an investment. One is as a practical and in-demand commodity whose properties give it many practical applications, similar to zinc or aluminium. The other is as a precious metal with a finite supply and inherent “folk value” similar to gold.

Silver prices are based on a combination of these two factors, which gives it a unique investment profile.

Silver as an industrial commodity

Silver’s chemical and physical properties, such as its conductivity and antibacterial properties, make silver essential for many electronics, healthcare and other applications.

Silver’s also malleable, ductile, reflective, relatively corrosion-resistant and not overly common, which historically made it a practical choice of metal for jewelry, coins and similar applications.

These also formed a practical foundation for silver’s status as a precious metal.

Silver as a precious metal

Silver (and gold’s) innate value as a precious metal is typically described in the context of its finite supply, or scarcity.

It’s not certain how much silver is left in the world, but some estimates suggest that Earth will run out of silver by 2050. These estimates, however, depend on a range of assumptions around silver’s continued use, how much we recycle and how likely miners are to uncover large previously-unknown sources of silver.

One economic theory holds that a commodity such as silver, which is in constant demand while having a finite supply, should carry a constantly-growing intrinsic value.

Proponents of this theory will often contrast the scarcity of silver with the theoretically infinite amount of government money, such as Malaysian ringgit, that can enter circulation.

For this reason, silver is often regarded as a hedge against inflation and currency devaluation, and its prices have been known to run opposite to the changing values of currencies.

What are the risks of investing in silver?

Silver is a staple material for many modern industries and there are a number of routes available for investing in it. However, regardless of which way you approach it, your investment will inevitably come with risks:

• Fluctuating prices: Valuable metals have a tendency to fluctuate in price over small periods of time, sometimes with no real cause.
• Storage: Finding somewhere to store physical silver can be a hassle, and storing it with a broker will come with a fee.
• Fraud: While it is tempting to look for the best prices, if it is too good to be true, it probably is. When buying physical silver, trade with reputable dealers to avoid being fleeced.
• Political and environmental events: Political and environmental issues can make the mining, refining and trading process more expensive for companies, causing price fluctuations.

Frequently asked questions

• How much is silver worth?

  You can find live silver prices here.

• How is silver found?

  Silver can be found all over the world, with some of the largest mines found in Australia, Mexico and Bolivia. It is extracted from ore veins and refined before being distributed.