SILVER is one of the metal commodities that has been traded through MCX. MCX stands for the Multi Commodity Exchange. MCX is the exchange where you can trade commodities such as gold, lead, nickel and agricultural products like cotton, coffee, turmeric, etc. just like the BSE exchange where stocks of companies are traded. The trading mechanism done through MCX is pretty transparent, and it is disciplined with the regulatory framework.
Silver is a gleaming grey-white metal that is soft and pliable. The first silver mine is in Anatolia( modern-day Turkey), and the mining of silver began 5000 years ago. The top three silver-producing mines are Fresnillo (Mexico), Cannington (Australia), and San Cristobal (Bolivia). Tajikistan, Central Asia is known to have some of the massive silver deposits in the world.
Just over half of the silver comes from Mexico, Australia, Peru, and China are the four largest silver producing countries. Primary silver mines produce about one-third of the world silver, while approximately two-thirds come as a by-product of lead, zinc, gold, copper mining. The primary sources of silver are the ores of silver, lead-zinc, silver-nickel, lead, obtained from Peru, Bolivia, Mexico, China, Australia, Serbia, Chile, and Poland. Mexico, Peru, and Bolivia have been mining silver since 1546, and are still significant world producers.
Why Should I Invest In Silver?
Silver has many applications in art, science, industry and beyond. At the extraordinary level, though, demand for silver breaks down into three essential categories: silver in industry, investment, and silver ornaments and décor. These three categories altogether represent more than 95% of the annual silver demand.
With unique characteristics, such as its strength, malleability, and ductility; its thermal and electrical conductivity; its sensitivity to high reflectance of light; and the ability to withstand extreme temperature; it is an element without replacement. Commercial-grade exceptional silver is at least 99.9% pure, and purities higher than 99.999% are available.
Reasons for trading MCX Silver Price:
One of the valid reasons for investing in silver is that it's a safe commodity to trade during an economic crisis. Central banks usually react to the crisis by reducing interest rates and raising the money supply. These actions can influence weakening currencies and erode trust in stock and bond markets.
Unlike financial assets, tangible assets such as silver can't be created on paper. There is a restricted above-ground supply of silver. Hence, it is far more likely to trade on silver than financial assets to maintain its value during periods of turmoil.
Industrial Strength is very crucial when it comes to the Global Economy. Silver is essential to many industries, so strength in the global economy should translate to higher prices. Notably, silver demand for jewellery is active in India. As these and other emerging market nations continue to develop, their demand for silver could improve sharply.
Factors Influencing the Market:
Economic events such as India’s industrial growth, the global financial crisis, deflation, recession, and inflation affect prices.
Geopolitical circumstances involving governments or economic criteria and armed conflict can cause significant changes.
Commodity-specific situations, such as the construction of new production plants, the introduction of new processes, unexpected mine or factory closures, and business restructuring, can also affect the market.
Before trading in silver it’s always good to learn these contract specifications of silver:
The symbol used is SILVER, and the trading unit is 1kg.
The contract starts at 16th of a contract launch month and the last trading day falls on the 5th of the contract expiry month. If the launch day is a holiday, the following day is considered to be the launch day. Whereas expiry day falls on a holiday, then the previous day is an expiry day.
Trading is open from Monday through Friday and the trade hours are 10.00 a.m to 11.30 p.m/11.55 p.m
The Trading unit is 30 kg and the tick size is Re.1 per kg.
The maximum order size for trading is 600 kg, and the base value is 1kg.
The initial margin is a minimum 4%, or sometimes it is based on SPAN, whichever is higher.
And the extreme loss margin is a minimum of 1%.
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