This post is for educational and informational purposes only and must not be constructed as containing investment advice. The blogger who wrote this post is not a financial advisor, depending on your country and local regulation, you should seek advice from the appropriate financial advisors to ensure you are informed about the risks.
Status: Ongoing writing.
a list of already published how to trade guides can be found HERE.
do your own research
Last update: August 5, 2026
Summary
this post should have HOW TO TRADE KAG as a title, but due to the fact Silver encapsule KAG and many other asset backed or linked to Silver, i taught that HOW TO TRADE SILVER make more sens.
Many guides available online critisize silver for its inability to generate an income like interest for bonds or dividend for stocks.
The best idea that you can take from this post is the fact that you can stake silver backed cryptocurrencies, and this make KAG (or Silver) income generating.
Silver is really scare, and a majority of holders voting yes for a governance proposal increasing silver supply is a joke. It is a real world asset that is very complicated and expensive to produce in a lab, at the opposite of diamond and emeralds that can be made in a lab at an affordable cost.
If you are a trading beginner not planning to hold it, you should ignore the narative about silver : safe heaven, store of value,…. I personaly think that there is no safe heaven for a trader, instead there is a market price and a lot of unexpected events.
Silver has a low volatility, it presents fewer opporunities for a short term trader to take profit, allocating 2 % at most of your entire position to silver is probably the right thing to do.
1- Category
2- Utility
3- Market capitalization
4- Competition
4-A- income
Silver as an investment is in competition with three major assets : gold, bonds and stocks. If interst rates and dividend drop, than some of investors capital should be parked elsewhere.
4-B- Reserve
USD, EUR,... are known to be used as reserve by many central banks in the world and there is actualy a growing discussion about initiating or growing reserves in other assets such as silver, bitcoin, ethereum,….
5- Macro trading
Macroeconomic trading is a vast field in trading that require an academic and profesional understanding of a broad range of topics in economics to be able to understand change in indicators, news, indexes, metrics,... published all days and trade on them. The skils set include some advanced mathematics and financial modeling that needs software programming to be operated eficiently.As soft skills, a macro trader must have a good understanding of national politics and geopolitics. A good Macro trader does not specialize in one market, he must know how forex, bonds, stocks, commodities (like Silver),….. interacte with each other. They know how to interprete numbers and how trends and prices form.
6- Ecosystem
6-A- Non profit
6-A-2- London Bullion Market Association
LBMA’s rôle is to advance standards in refining and promote operating in the global precious metals industry. LBMA protects the interest of those who buy and sell precious metals by assuring the quality of what is traded on the Loco London Market.
6-B- Trading vehicles
this section is not talking about other possible silver trading vehicles such as :
- - Futures,
- - Options,
- - CFDs,
- - Mutual funds,….
I see instruments listed above as too advanced for a beginner, and unecesary sophistication for a trading beginner with a small capital. Derivatives can be very useful, but it make sens to use them only when your trading portfolio is large and risky enough.
6-B-1- Silver backed cryptocurrencies
I have read some other HOW TO TRADE SILVER writen by others, many are talking about silver as a none yielding asset that provide no income such as interest or dividend. I would like to highlight that many silver backed cryptocurrencies can be staked, a holder can get 4-5 % APY from staking without loosing ownership. This of course change how silver is compared to stocks and bonds. I think that people holding physical silver must review their position and consider staking as a new source of income.
a post dedicated to Silver backed cryptocurrencies is available in this LINK
6-B-2- Physical Silver
this is a traditional way to invest in silver, .
For a trader with a structural cash shortage, storing gold at home is a bad idea for many reasons, one of those reasons is that you can no longer use your gold as a collateral to get a loan.
I dont recomend physical silver, it’s a bad idea.
6-B-3- Silver ETFs
| Category | Number |
|---|---|
| Total |
Trading or holding silver ETFs is one of the simplest and safest ways available and present some advantages such as :
- - 5/7 strong liquidity,
- - easy transaction and storage,
- - easy to manage legacy in case of suden death,….
6-B-4- Silver mining stocks
miningfeeds.com investing in silver mining stocks is in fact an investment in silver mining operations :
- - exploration,
- - mining,
- - production,
- - refinement,
- - distribution,….
of course there is a link between the two, but it is not an investment in silver. This does not make sens for silver where there is many vehicles that track the price of silver directly. This can fuly make sens for industrial metals if they are not tokenized or tracked by an ETF, such as :
- - lead,
- - molybdenum,
- - zinc,
- - tellurium,
- - germanium,….
I will not advise investing in silver mining stocks because it is not silver (the metal).
7- Stakeholders
7-A- Central banks trading
central banks are sovreign institution with a huge due diligence and risk management background, if they are buying silver, it tells about the safety of silver as an investment. Central banks can influence the silver market because of the size of their market operations. They use silver as strategic reserve and hedge against currencies exposure. Large central banks and governments do not follow the trends, they initiate them, because they are the most involved players in the market.
| Central bank | Gold holding |
|---|---|
| federal reserve | |
| european central bank | |
| people bank's of china | |
| bank of england | |
| Turkey | |
| india |
7-B- individuals
highly convicted, they are passionate investors who allocate large part of their long term position into :
- - physical silver bars,
- - physical silver coins,
- - silver related stocks,
- - silver related futures contracts,....
7-C- Hedgers
Hedgers are institutional investors managing diversified portfolio with strong emphasis on risk coverage, they use silver among other tools to reduce risks linked to possible prices trends in the future. Because of their size, hedgers have significant influence on silver price.
7-D- Mining companies
Mining companies are on the supply side, large silver funds traders are closly monitoring production forecast and production report by mining companies. They can injecte large quantities of silver into the market or fail to do so, and this can have an impact on silver price. Problems in exploration and production or the announcemet of the shut down of a silver mining site can have an impact on silver price.
7-E- Speculators
Speculators can be retail or institutional short term holders interested in taking profits as soon as they materialize.
7-F- Jewelry manufacturing
depending on the country, city, rural or urban areas, Jewelry can be used by womens as luxury, prestige, elegance, power, … item. It helps express or signal social class, wealth or rank in the local community.
-->
7-G- Bars and coins
7-H- Technology electronics
gold carechteristics such as :
- - corrosion resistance,
- - heat conductivity,
- - electrical conductivity,…
makes it a good choice for :
- - microchip,
- - switches,
- - printed circuit boards,....
in a simple word, if you are using:
- TV remotes,
- desktop,
- microwave,
- Solar Panels,
- battery cells,....
there is a small piece of silver in them.
7-I- Silver Corporate treasury:
as a corporate treasury asset, Silver present a use case different from Bitcoin.
Bitcoin corporate treasuries are designed to strengthen the balance sheet with the goal of making money from the increase of BTC value in the future. Silver is more like gold both acting as a hedge, the price forecast are less ambitious than those of Bitcoin, but silver is commonly agreed on as safety net for an uncertain future.
| Company | Silver reserve |
|---|---|
| Total |
7-J- High Profile
8- Silver ups and downs
there is a domino effect playing in what can cause the other, one event can trigger a series of reaction that can lead to the price of silver going up or down..
9- Why would someone need to buy Silver ?
9-A- Privacy
in some small countries there is absolutly no way to get some basic privacy, people can network and unlawfully get your bank account details in 3 or 4 phone calls. In such situation silver can provide some minimal privacy.
9-B- Diversification
i dont agree with the idea of silver being a safe heaven, i see it as counter trends asset, it could rise in stocks adverse market conditions, when others fall.
10- Why KAG go down ?
Silver going down is a combination of low demand for silver and high supply of silver.
Please pay attention to the fact that when i say going down, it is only for the short term. the global long term trend for silver is the increase in price because of the limited supply. the price stagnate, it does not agresively go down
10-A- Low inflation
in daily life, low inflation means that you need less money to buy the same thing that you bought in the past for more money. Individuals may describe the situation as money increasing in value. Silver is no longer in this situation, if banknotes are expected to buy more things in the future, than one should save some money because it is expected to keep its value in the future.
10-B- Low Demand for Silver
10-B-1- Central banks - interest rates hike
central banks may decide to raise interest rates to slow demand and inflation, if investor see rates profitable enough and a low probability of sovereign default, they will decide to sell silver and invest in bonds.
10-B-2- Strong US Dollar
a strong US dollar mean that none americans need more of their local currency to buy US dollars, for them this mean that silver price is higher, this of course can repel buyers or investors and push the price of silver down.
10-B-3- Jewelry
middle class are the ones able to grow demand for jewelry, economic policiess queezing midle class for fiscal optimization for example can left midle with no excess saving to buy jewelry. This will corner people to buying less or no silver at all. The reduction in demand will stop jewelery manufacturing raw silver, pushing the price down.
10-B-4- industrial demand
You may be thinking right now about buying a new television, and this is the best way to understand demand for silver coming from technology and electronics. Why you cant buy a new one is what lower the demand for silver. You were able to buy a new television few months or years because you had the money, this is what increase demand for silver.
10-C- High Supply
10-C-1- Mining
10-C-1-a- Mining - Short term
Mining is what supply the market with silver, there are mining sites in different countries arround the world, the discovery of new reserves and the development of mining operation can increase silver supply and push the price down.
10-C-2-b- Mining - Long term
supply can only decline, and recycling is the only way left to provide silver to more valuable use.
10-C-3- Central banks
10-C-3-a- Central banks reserve
Central banks have large silver holding, if one central bank decide to sell a portion of its reserve, it will increase silver market supply.
10-C-3-b- New assets as reserve
there is a growing discussion about central banks form reserves in other type of assets, such as Bitcoin, Ethereum, ….some may consider this idea as theortical and absurde now, but it is possible.
10-C-4- institutional
institutional can decide gradually or collectively to decrease their allocations to silver, and realocate to other assets. By doing so they can increase market supply and push the price down.
10-C-5- Traders - Stock Market
Traders with diversified positions can also sell portion of their silver to buy additional stocks whenever the stock market present clear opportunities for profit.
a strong stock market can atract more capital, traders and investors expecting higher earning and dividend can decide to rebalance their positions, sell some gold to fund additional stocks purchase. This of course can push the price of silver down.
10-D- Crisis end
an individuals trusting the institution at the end of a crisis can consider selling their silver and depositing cash in their bank accounts again. The trust can be motivated by the end of a crisis, recovery from disaster, political stability,...
10-D-1- Wars
Countries reaching peace agreement after a period of war does not serve the interest of defense industrial complexes, for them it mean slowing the production of amunition, but it is an event awaited by other major economic actors such as tourism and real estate developers.
it means that government are no longer constrained into defense overspending and inflation resulting from it, this increase expecation of govrnement budget rebalance and lower the risk of sovereign debt crisis.
Bonds traders see bonds with high interest rate, and the expectation of derease in interest rate resulting from an expected low inflation as an (historic) opportunity. for them the reasoning is as follow:
i'm going to sell some silver and invest in bonds
10-D-2- Elections results
Many CEOs and executives in the banking and financial sectors are political science graduate, with a deep understanding of political ideologies and economic policies resulting from them. they closely follow political leaders speeches and election programs announced by political parties, attempting to predict government increase or decrease in spending, the impact that it can have on their holding and preparing action plans to rebalance their portfolios.
a politicial promising to lower public spending and wining the election, means that inflation and silver price are expected to go down.
10-D-3- Political instability
Social unrest for example moves the markets, for stocks holders it means simply less earning and less dividends. for the business community, a country regaining its political stability after a period of unrest means that its time to sell some silver and invest in some new project.
10-D-4- Sovereign debt crisis
ending a country budget deficit and having a healthy level of debt require elected official to apply some combination of policies such as:
- - lowering military spending,
- - lowering social spending,
- - collecting more taxes or tarrifs,
- - devaluating local currency to boost export,....
for investors a diversified holding, a country regaining control of its public finance can mean that the country is becoming solvent and the bonds are safe to invest in. for them it is time to sell some silver and invest in bonds.
This is where silver can decrease in value, investor like bonds because they are income generating and less risky than stocks.
10-D-5- Financial sector crisis
Financial sector crisis were historicaly caused by :
- Stock market bubble burst,
- Collapse of a large bank,
- Country unsolvency,....
Those crisis take time to end, but at the end, investor timing the market to enter again will sell portion of their silver, pull cash to fund new investment projects. the increase in silver supply push the price down
10-D-6- Natural disaster
Storms and flooding can destroy farms and reduce food available in the markets, this of course can trigger inflation or contribute to already existing inflation.
Storms and flooding can make reconstruction of destroyed infrastrucutre unavoidable, such increase in spending is seen by some investors as a risk of increase in inflation.
The end of such crisis can mean that local currency is safe to hold and invest, the selling of silver resulting from such situation can push silver price down.
10-D-7- Global health crisis
crisis such as covid-19 can increase chance of total colapse of government and its ability to pay back bonds, investors and even individual will than see silver as something that can keep its value. at the end of such crisis, the opportunities for investment and growth can be huge. investor will not hesistate to sell portion of their silver holding to be able to catch thos opoortunities, by doing so they will push the price of silver down.
11- Why KAG go up ?
Silver price going up is a combination of high demand for silver and low supply of silver.
11-A- inflation
in daily life, inflation degrade purchasing power, it means that you need more money to buy the same thing that you bought in the past for leser money. Individuals may describe the situation as money loosing its value. Silver is used as protection against inflation, if banknotes are expected to buy fewer things in the future, than one simply should buy some silver because it is expected to keep its value in the future.
11-B- High demand
11-B-1- Central banks
Central banks have lage silver holding, if one central bank decide to buy additional silver to grow its reserve, it will decrease silver market supply. Remember that this post you are reading is part of series of posts guided by position sizing, In fact central banks have trading rooms where highly qualified traders have a trading position, if for example india central bank see that the USD is becoming risky, lets say there is talks about the US government inability to pay back government bonds at maturity date for example, tthey will change their allocation, reduce dollar holding and buy some silver. And this of course will push silver price up.
11-B-2- institutional
institutional can decide gradually or collectively to decrease their allocations to stocks and bonds for example, and realocate to silver. By doing so they can decrease market supply and push the price up.
11-B-3- Jewelry
middle class are the ones able to grow demand for jewelry, economic policiess queezing midle class for fiscal optimization for example can left midle with no excess saving to buy jewelry. This will corner people to buying less or no silver at all. The reduction in demand will stop jewelery manufacturing raw silver, pushing the price down.
11-B-4- Traders - Stock Market
a weak stock market can repel capital, traders and investors expecting lower earning and dividend can decide to rebalance their positions, sell some stocks to fund additional silver purchase. This of course can push the price of silver up. Stock traders can survive a bear market if their silver allocation is well sized, among other decisions.
11-B-5- Weak US Dollar
a weak US dollar mean that none americans need less of their local currency to buy US dollars, for them this mean that silver price is lower, this of course can attract buyers or investors and push the price of silver up.
11-B-6- Jewelry
Jewelry is one of the use cases that can increase demand for silver, individuals arround the world buying collectively during the wedding seasons for example can push the price up. From a long term perspective, jewelry increase sales is linked to the rise of middle-class able to earn, spend, save and aspire to a new lifestyle.
11-B-7- industrial demand
You may be thinking right now about buying a new television, and this is the best way to understand demand for silver coming from technology and electronics. Why you cant buy a new one is what lower the demand for silver. You were able to buy a new television few months or years because you had the money, this is what increase demand for silver.
11-C- Supply
11-C-1- Short term
Mining is what supply the market with silver, there are mining sites in different countries arround the world, in the short term a large disruption in mining operation can reduce supply and push the price up. For cryptocurrencies with capped supply, the limited supply is the result of tokenomics rule. For a RWA like silver, a limited supply is a real thing, there is no silver left to mine !
11-C-2- Long term
In the long term, This is a one way trend, the supply can only decrease and the price can only go up.
11-D- Crisis start
an individual fearing the loss of access to his bank account can consider investing in silver as a form of safety. The fear can be motivated by war, political instability,...
as a trader you certainly read many guide advising traders to set stop loss, crisis start is the reason why you should do that. basicaly it is the moment in time where everyone is rushing to get their dollars so they can invest them in other assets such as silver.
After that it is too late, you can not sell unless you accept heavy losses. and it could take time for the crisis to end:
| Crisi | Last |
|---|---|
| Covid-19 | 3 years |
| 2008 financial crisis | 18 months |
| dot com | 2 years and a half |
11-D-1- Wars
winning a war require a lot of defense spending, government can find themselvse fighting two wars : a military war and an economic war. It is about ensuring economic growth, providing funding for military equipements, spending enough to win the war without trigering inflation or sovereign debt default.
I also want to highlight the fact that the actual geopolitical (i’m not an expert in the field) situation is realy dangerous, the possible world war 3 could aggravate the united states sovereign debt situation. I will not call it an opportunity because it’s war, but a trader or investor can rationaly allocate 2 % to silver and keep an eye on the situation in Ukraine, iran, and taiwan. (cross finger for peace, not silver).
11-D-2- Political instability
Some political conflicts can stay incubated (hiden) for years until they explode, when that happen, the chain of events can spirale out of control. investors see those events as a source of anxiety and will not hesitate to quickly realocate portion of their positions to silver.
11-D-3- Sovereign debt crisis
the is a very political and polarizing topic, it does not make the headlines every day but this does not mean that the counting has stoped. A trader should take a look at the numbers provided by projection websites such as www.us-debt-clock.com/live from time to time and buy or sell gold accordinly.
Silver is for the extreme case of sovereign debt default, a situation post inflation and increase of interest rate, a situation where investor are not interested in investing in bonds even with high interest rate because they think the government is insolvent and will not be able to pay back the bonds at maturity date.
This is where silver can increase in value, growing a silver holding is in fact a way one can prepare for the bankruptcy of the government?!!!!
people should know that countries leaders will care less about their countries bankraptcy if they are threatned by something worse :
- - nuclear strike,
- - humiliation by nuclear strike threads,….
Basicly its the war that no one wants that make silver valuable.
11-D-4- Financial sector crisis
Permissive regulation or new technologies where investors have no experience can create and grow cyclic bubbles, everything is going smouthly until its not. one company colapsing can bring others down because of interdependance created over time.
The stock market crashed many times in the past and will basicaly continue to do so, when that hapen, basicaly investors see silver as a temporary refuge until the market recover. the demand for silver resulting from such events push the price of silver up.
11-D-5- Natural disaster
storms, floodings, earthquicks, fires,.... can disturb economic activity, stop production in some manufacturing plants, repel travelers from visiting the country, cut road for goods transportation.
For stocks holders it simply mean lower dividend, realocating a portion to silver allows them to minimize losses and stay in the market, waiting for better days.
the additional demand for silver push its price up.
11-D-6- Global health crisis
crisis such as covid-19 and the quarantine of the population can totaly destroy an economy, in such situation the control of inflation is no longer a priority. the governement can intentionaly print money as they say to keep the economic engine turning and avoid the collapse of the socioeconomic system. If such context is reproduced, it will push the price of silver up.
13- How to stay informed about KAG?
Here you can find a list of resources to stay informed about KAG.
13-A- KAG News:
13-B- Limited access / require subscription:
| News Outlet | |
|---|---|
| 1 | forbes.com/search/?q=kag |
Sharing helps support this blog. if you found this post helpful, please share it with your friends!
ADS
No comments:
Post a Comment