Local and global silver markets are witnessing a state of sharp fluctuation and confusion after global prices hit $49 per ounce during Tuesday's trading—the highest level since 2011. This surge is supported by increased demand for safe havens amid the US government shutdown and rising political and economic risks, alongside strong expectations for a cut in US interest rates, according to a report from the Safe Haven Center.
The report indicated that local silver prices remained stable during today's trading:
800-karat silver recorded about EGP 69 per gram.
925-karat silver was approximately EGP 86 per gram.
999-karat silver was about EGP 86 per gram.
The 925-karat Silver Pound remained stable at EGP 640.
In contrast, the global ounce stabilized at $49, its highest level in 14 years, driven by increased investment appetite and declining confidence in traditional financial instruments, with markets increasing bets on further US monetary easing.
The report noted that silver prices rose by 13.3% locally over the past week, coinciding with a global rise of 4.4% to close at its highest level since August 2011. This was supported by a weaker dollar, increased industrial demand, and growing expectations for a rate cut.
Local Market Chaos and Trading Halt
The Safe Haven Center revealed a state of pricing chaos in the local market after some raw silver dealers unjustifiably raised prices, followed by a severe shortage in supply, leading some traders to stop selling in anticipation of further increases.
The Center stated: "The silver market has begun to enter a dangerous phase; we noticed that some raw dealers raised prices above normal levels without justification, and then moved to reduce supply, which created a state of paralysis and confusion in trading."
It added: "If the situation continues this way, we might witness illogical price jumps in the coming period, which necessitates urgent intervention to regulate the market and prevent monopolistic practices and pricing manipulation, to protect the consumer and the investor."
The report indicated that some factories have already halted production due to a shortage of raw materials after raw dealers refused to sell, anticipating higher prices. This comes amid a continuous wave of increases on global exchanges, coinciding with the rise of gold (approaching $4,000 per ounce) and increasing demand for safe havens amid global economic uncertainty.
Historical Background and Supporting Factors
This current price is the highest for silver since 2011, when it touched the $50 per ounce threshold for the second time in its history, having first reached that price in 1980 during the Hunt brothers' attempt to corner the market.
Silver Performance and Key Drivers
Silver prices were driven up by several factors, most notably the ongoing US government shutdown (which appears likely to be prolonged), increasing political ambiguity in France and Japan, and growing expectations of more flexible monetary policies globally, which pushed investors toward safer, alternative assets.
Silver and gold are strongly supported by a weaker US Dollar, rate-cut expectations, central bank purchases, geopolitical tensions, and concerns over the weakness of fiat currencies. Silver is unique due to its dual nature as both a precious and industrial metal, with its performance affected by both investment and industrial demand.
Supply-Demand Imbalance
According to the Silver Institute, industrial demand reached a record level in 2024 at 680.5 million ounces, driven by demand from solar energy, electrical infrastructure, and electric vehicles. Despite a 3% decline in overall demand, it exceeded supply for the fourth consecutive year, recording a deficit of 148.9 million ounces. The deficit is expected to continue for the fifth consecutive year in 2025, with expected production of 844 million ounces against a demand exceeding 940 million ounces.
Silver Outperforms Gold
Silver has seen an increase of approximately 67% since the beginning of the year, outperforming gold, which rose by about 50%. The gold-to-silver ratio dropped to 81 points, its lowest level in a year.
Warnings and Future Outlook
The firm Metals Focus warned that an excessive rise might lead to a decline in industrial demand due to "industrial saving," as companies seek to rationalize their use of the metal and cut costs. Analysts expect technological development in the solar energy sector to reduce silver consumption by 15–20% this year, but they affirm that the significant growth in clean energy will continue to support long-term demand.
Despite the potential for industrial rationalization, analysts do not expect the overall upward trend to be affected, with the anticipated supply deficit continuing at 187.6 million ounces this year, the third-largest historical deficit. Experts believe that continued strong investment demand will keep prices at high levels, while silver remains a key component in the global transition towards renewable energy and electrical technologies, reinforcing its status as a strategic metal in the coming phase.
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