Silver market attracts frustrated investors

With Mainland equities continuing to suffer, and the real estate sector still under tightening measures, what's left for Chinese investors? Apparently all that glitters is still precious metals. Silver is proving to be a popular choice these days, given it's easier to access compared to gold.

Investing in silver.

Besides silver jewellery, investors have a real appetite for silver bars.

With the year end approaching, market demand for silver bullion is intensifying.

Zhang Hong, Bank of China, Jiangsu, said, "Silver bars are a good choice for investors, as the price of silver has been on an upward trend. It increased by 10 percent in 30 days, with a positive outlook."

But investing in silver has its own uncertainty. Weak liquidity is a major risk, and the price of silver bars is highly inflated right now.

Zhang Ning, Deputy Manager of Holly Futures, said, "It's December, the year end is coming, and we suggest investors to keep an eye on their positioning, as the price has fluctuated earlier. "

Some investors are turning to silver forward contracts to hedge and seek earning opportunities.

The Shanghai gold exchange has introduced a regulated silver forward contract to investors, while the Shanghai Futures Exchange is also offering silver futures contract. Analysts say, if market participants succeed in managing risks and learn to diversify their positions, paper based silver investments will be a plus for silver trading.