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Market Intelligence › Basic Terminologies
The different character of each, and the difference in contract sizes
Published by The Retail Trader · JUL 28, 2026 · Derivatives & Commodities
Gold and silver are both precious metals and often move together. But they behave differently, and for trading that difference matters a lot.
A large part of gold is driven by investment and central bank demand. That is why it is often strong in times of uncertainty.
Silver has a larger share of industrial demand. So it behaves like a precious metal on one side and like an industrial metal on the other, and its volatility is clearly higher than gold's.
On the exchange both have several variants:
• Contracts come in different sizes so that smaller participants can take part.
• The smaller contracts often have less liquidity than the larger ones.
• Purity and delivery specifications are written differently for each contract.
• The international price is in dollars, so the movement of the rupee also shows up in your return.
One percent in silver is not like one percent in gold, since its normal daily move is much larger. Holding the same lot count in both means taking two completely different risks, even if the rupee values look close.
This article is for educational purposes only. It is not a buy or sell recommendation, not a claim of guaranteed returns, and not advice. Rules, rates and mechanics change from time to time at the exchanges, SEBI and the RBI, so verify every number yourself with your broker or an official source.