Silver continues its rally, with ounce gains nearing 150% in 2025

Silver prices continued their strong rise in local markets and on the global exchange during Wednesday’s trading, after the ounce reached unprecedented record levels. The rally has been supported by growing industrial and investment demand, alongside a persistent structural deficit in global supply, according to a report issued by the Safe Haven Center.

On the local market, silver prices jumped by about two pounds per gram. The price of 800-grade silver rose from EGP 88 to EGP 94 per gram, while 925-grade silver recorded around EGP 109. Pure silver (999) reached nearly EGP 117 per gram, and the silver pound remained stable at EGP 872.

Globally, silver rose by about two dollars to trade near $72 per ounce, marking the highest level in its history. This move reflects an exceptional combination of long-standing supply constraints and accelerating industrial and investment demand since the beginning of the year.

The report noted that silver has achieved gains exceeding 148% since the start of 2025, significantly outperforming gold, which has risen by around 70% during one of its strongest years since 1979. This rally has come as part of a broader upswing across the precious metals complex.

The gold-to-silver ratio, which measures how many ounces of silver are needed to equal the value of one ounce of gold, stood at approximately 62.26 during Wednesday’s trading, underscoring silver’s improved relative performance versus gold.

Rising uncertainty surrounding supply conditions, coupled with global trade disruptions, has boosted defensive flows into both gold and silver, particularly amid thinner trading volumes associated with the holiday season.

Both precious metals maintained their momentum during European trading hours, supported by a mix of macroeconomic indicators, monetary policy expectations, and ongoing concerns over global supply. With liquidity declining toward year-end, investors have increasingly favored precious metals as portfolio hedging tools rather than short-term speculative trades.

Precious metals markets have also benefited from heightened awareness of risks linked to global trade disruptions and supply concerns, especially in the energy sector. Recent legislative measures affecting shipping and commodity flows in key producing regions have added another layer of uncertainty to global markets, prompting investors to shift toward assets traditionally viewed as stores of value.

Against the backdrop of subdued holiday trading conditions, this defensive stance has strengthened inflows into gold and silver, reinforcing their role as macro hedging instruments rather than purely speculative assets.

Expectations of monetary policy easing remain a key source of support, as markets increasingly price in the likelihood that the U.S. Federal Reserve will cut interest rates several times in 2026, amid slowing inflation and signs of cooling momentum in the labor market. Lower interest rates typically favor non-yielding assets such as gold and silver by reducing the opportunity cost of holding them.

According to CME FedWatch data, expectations for rate cuts have shifted noticeably in recent weeks, reflecting growing confidence that the monetary tightening cycle is nearing its end.

On the other hand, some strong U.S. economic data have partially capped the rally. The Bureau of Economic Analysis reported that the U.S. economy grew at an annualized rate of 4.3% in the third quarter, well above market expectations—a development that generally supports the U.S. dollar and can weigh on precious metal prices.

At the same time, weaker consumer confidence readings, with the Conference Board’s index falling to 89.1 in December, point to underlying caution among U.S. households.

As investors await key labor market indicators in the period ahead, gold and silver remain caught between monetary policy expectations and global risk management considerations—a balance likely to shape price trends in the coming year.

Silver, like gold, has been one of the standout performers of 2025, attracting both traditional precious metals investors and new entrants seeking alternatives to highly volatile equity markets. Although silver remains far cheaper than gold in absolute terms, its relative gains have been striking. The metal began 2025 at around $29 per ounce before surging to nearly $72 by late December—more than doubling in value over the year.

This rapid acceleration reflects not only strong investor appetite but also structural factors, including inflationary pressures, supply constraints, rising geopolitical risks, and robust industrial demand.

Rate cuts by the Federal Reserve in late 2025 further boosted interest in physical assets, giving silver an additional lift. As prices hover near record highs, investors are now weighing whether silver still has room to climb or if a period of consolidation is more likely.

In this context, some experts caution that any potential move by the Federal Reserve to raise interest rates in 2026 could put pressure on silver prices. Higher rates tend to increase returns on alternative investments, such as high-yield savings and fixed-income instruments, potentially reducing demand for silver as investors favor liquidity and stable returns over price volatility.