Silver Falls 3.8% in Egypt and 4.8% Globally Over the Past Week

Silver prices in the Egyptian market declined by 3.8% over the past week, while global silver prices fell by 4.8%, as renewed strength in the U.S. dollar, rising U.S. Treasury yields, and growing expectations that the Federal Reserve will maintain its restrictive monetary policy continued to weigh on precious metals.

Local silver prices declined by approximately EGP 4 per gram during the week, with 999 silver opening at EGP 104 per gram and closing at EGP 100. Meanwhile, the global silver price dropped from $63 to $60 per ounce, losing around $3 over the course of the week.

The price of 925 silver stood at around EGP 93 per gram, while 800 silver traded at approximately EGP 80 per gram. The Egyptian silver pound coin was priced at around EGP 744.

Silver came under pressure as U.S. Treasury yields moved higher, the dollar regained strength, and investors increasingly anticipated that U.S. interest rates would remain elevated for a longer period, or even rise further if geopolitical tensions and higher oil prices fuel another wave of inflation.

Higher interest rates and real yields typically reduce the appeal of non-yielding assets such as precious metals, while a stronger U.S. dollar makes gold and silver more expensive for holders of other currencies, weakening investment demand.

Unlike gold, silver has a dual role as both an investment asset and an industrial metal. As a result, its price is influenced not only by interest rates and the U.S. dollar, but also by expectations for global industrial activity and demand from sectors including electronics, automotive manufacturing, and clean energy technologies.

Last week's trading reflected the continued volatility of the silver market. Prices initially rose on the back of softer U.S. labor market data, but those gains were largely erased as Treasury yields climbed again and concerns over inflation and monetary policy resurfaced.

The appreciation of the U.S. dollar against the Egyptian pound during the week absorbed a significant portion of the decline in global silver prices, limiting the transmission of international losses to the domestic market. This confirms that silver prices in Egypt are primarily driven by three factors: the global silver price, the USD/EGP exchange rate, and the local premium.

Silver recorded steeper weekly losses than gold, highlighting the metal's higher volatility due to the relatively small size of its market and the combination of investment and industrial demand, which often amplifies both upward and downward price movements.

Historic Peak Followed by a Sharp Correction

Silver opened 2026 at $72 per ounce before surging to a record high of $121 on January 29, posting gains of more than 68% in less than one month. However, the market subsequently entered a strong correction, with prices falling to around $60 per ounce, representing a decline of approximately 51% from the January peak and about 18% compared with the beginning of the year.

In Egypt, 999 silver opened the year at EGP 125 per gram before climbing to EGP 210 by the end of January. Prices have since retreated gradually to around EGP 100 per gram, marking a decline of nearly 52% from the peak and approximately 19% from the start of 2026.

The recent correction does not negate the medium- and long-term fundamentals supporting the silver market. According to projections by The Silver Institute, the global silver market is expected to record its sixth consecutive annual supply deficit in 2026, as total demand continues to exceed available supply despite modest growth in mine production and overall supply.

The ongoing deficit does not necessarily imply that every component of demand is increasing. The Silver Institute expects industrial demand to decline slightly this year due to reduced silver usage in certain photovoltaic applications. However, this is expected to be partially offset by stronger investment demand for bars and coins, alongside expanding silver consumption in artificial intelligence infrastructure, data centers, advanced electronics, and the automotive sector.

Higher prices do not automatically translate into a rapid increase in silver production because most global silver output is produced as a by-product of copper, lead, zinc, and gold mining operations. Consequently, supply tends to respond slowly to price movements, helping to sustain the structural market deficit.

StoneX expects silver to trade within a range of $55 to $60 per ounce in the near term, with the metal likely to remain more volatile than gold as it continues to be influenced by movements in the U.S. dollar, interest rate expectations, and gold prices. At the same time, the persistent supply deficit is expected to provide long-term support and reduce the likelihood of a prolonged collapse in prices.

The silver market is currently undergoing a repricing phase following the extraordinary rally recorded earlier this year. Silver's direction during the second half of 2026 will largely depend on the Federal Reserve's monetary policy path, the performance of the U.S. dollar, and the recovery of investment demand. Nevertheless, the structural global supply deficit remains a key supportive factor that could help silver gradually recover over the medium term despite continued short-term volatility.