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Shanghai Futures Exchange has received approval to start trading in silver futures from May 10 onwards. Speculation is rife about China playing an important role in deciding the fate of global silver trading market. Until now, Asian investors had to look towards international markets to trade in silver or trade indirectly on local Chinese markets. But, with Shanghai Futures Exchange receiving the approval to begin trading in silver future, investors should look forwards to a steady climb in silver prices. The advent of silver trading in China could see the Asian giant dominating the global silver market in the next few years. China has already been ruling the gold trading market and a big inflow of silver investments in the country means the prices on silver could witness less volatility and end of excessive manipulation of U.S. Exchanges. It will be difficult for American investors to influence the market in their favour, as investors from around the world will now have a say on silver's overall price point. Initially price volatility on silver price is expected as investors participate in the recently launched trading market. But this low should find some stability as retail investors continue getting attracted to silver for its lower price than gold and the China's newly found attachment with the metal. China is the third biggest silver producer after Peru and Mexico as well as world's largest gold miner. It is also the largest consumer of industrial silver prominently used in electronic and solar product. Research has predicted that silver prices will climb in 2012 as China's demands for industrial silver as well as jewelry, silver, silverware, and photography continue to rise. Shanghai Futures Exchange has set May 10, 2012 as the date to launch the trading of small silver futures contracts that are favourable to medium and small investors. Investors will be able to trade in lot size of silver futures, which is 15 kg. The minimum trading margin is 7% of contract value. Daily limits is fixed 5% of settlement prices of the previous trading day, and the last trading date is the 15th of the delivery month (postponed for legal holidays). The cut in margins by SHFE will permit more investors to trade in silver and help increase liquidity of silver futures contracts. SHFE efforts are principally to provide a hedging tool to silver producers and consumers in China who belong to one of the largest silver producers in the world. As China continues to expand it silver import and export zone, it seems the Asian giant is finally becoming the premier trading hub for precious metals such as gold and silver. The author is an experienced journalist in silver market, mining & stocks, who frequently writes articles related to silver prices, silver spot price including tips on investment in silver. Please visit silverprices.com for more details.
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