Silver Falls Locally and Globally Amid Dollar Strength and Trade Optimism—Markets Await Fed Decision

Silver prices fell in both local and global markets on Tuesday, pressured by a decline in demand for safe-haven assets and a stronger U.S. dollar, while optimism over progress in U.S.–China trade negotiations fueled investors’ risk appetite, according to a report by the Safe Haven Research Center.

The report noted that local silver prices dropped by EGP 3 last week, with 800 purity silver declining from EGP 72 to EGP 69 per gram, 925 purity recorded at EGP 80, and 999 purity at EGP 86, while the silver pound remained stable at EGP 522.

Globally, silver fell by around $3, trading near $46 per ounce, extending a sharp correction that began after the metal hit its mid-October peak. Market data shows that silver has lost over 16% of its value since reaching roughly $55 per ounce, marking its steepest decline since the second quarter of this year.

Analysts attribute the drop to easing geopolitical concerns and improved economic sentiment as the U.S. and China move closer to a new trade agreement. This optimism encouraged investors to reduce their exposure to safe-haven metals in favor of riskier assets. The U.S. dollar index climbed to its highest level in two weeks, adding further pressure on dollar-denominated commodities by making them more expensive for holders of other currencies and dampening investment demand for silver.

Markets are on edge ahead of the Federal Open Market Committee (FOMC) meeting, which concludes Wednesday with a rate decision. Expectations point to a 25-basis-point rate cut, the second consecutive reduction this year. However, Federal Reserve Chair Jerome Powell’s tone remains the key factor shaping precious metals sentiment—

a dovish tone could stimulate demand for silver, while a hawkish stance might sustain selling pressure.

On the geopolitical front, U.S. President Donald Trump expressed confidence in reaching a “fair” trade deal with Chinese President Xi Jinping during their upcoming summit in South Korea this week. Senior officials from both sides have been working on a preliminary framework ahead of the meeting, alongside a series of U.S. trade and minerals agreements across Southeast Asia. These developments pushed Wall Street indices to new record highs, reinforcing investor optimism and weighing on safe-haven assets.

Analysts describe the ongoing pullback as a healthy correction following a strong rally earlier driven by robust industrial demand and geopolitical tensions. Portfolio rebalancing and profit-taking have accelerated ahead of key monetary policy decisions.

Silver remains more sensitive than gold to shifts in investor sentiment due to its dual nature as both a safe-haven asset and an industrial metal essential for technology, solar energy, and electronics manufacturing—a combination that amplifies volatility during periods of economic transition.

Despite recent declines, industrial demand fundamentals—particularly from renewable energy and electronics supply chains—continue to provide structural support for silver’s long-term outlook. International analysts project higher average prices over the medium term if momentum in the clean-energy transition and manufacturing expansion persists.

Current trading patterns reflect a delicate balance between trade optimism, which fuels risk appetite, and monetary caution, which caps sustained rebounds ahead of the Fed’s announcement. While the short-term drop appears sharp, the market retains strong underlying drivers that position the white metal as an attractive investment in the months ahead—especially if monetary easing coincides with renewed industrial demand globally.