Silver prices in the Egyptian market declined by around 2% over the past week, while the global silver price fell by 6.7%, as markets faced pressure from renewed inflation concerns, rising expectations for higher U.S. interest rates, continued profit-taking, and the liquidation of investment positions built during the metal's record-breaking rally earlier this year.
The price of 999 fine silver declined by approximately EGP 2 per gram during the week, falling from EGP 100 at the beginning of the week to around EGP 98 at the close.
Meanwhile, 925 sterling silver traded at approximately EGP 91 per gram, while 800 silver reached around EGP 79 per gram. An eight-gram sterling silver coin (925 purity) was priced at approximately EGP 728.
Globally, silver lost nearly $4 per ounce during the week, declining from around $60 to approximately $56 per ounce, representing a weekly loss of 6.7%. The decline exceeded that of gold, reflecting silver's greater price volatility and its higher sensitivity to investment flows and industrial demand.
Interest Rates and Inflation Continue to Pressure Silver
The decline in silver was driven by a combination of factors, led by renewed inflation concerns following higher oil prices amid geopolitical tensions in the Middle East, together with rising U.S. Treasury yields and expectations that the Federal Reserve could maintain restrictive monetary policy for longer.
The yield on the U.S. 10-year Treasury note reached around 4.62% early in the week, while the two-year Treasury yield climbed to its highest level since early 2025, increasing the attractiveness of fixed-income assets relative to precious metals, which generate no regular income.
These pressures eased somewhat later in the week after U.S. producer prices declined by 0.3% in June, leading to a pullback in both the U.S. dollar and Treasury yields, while reducing expectations of an immediate interest rate increase.
Although the U.S. Dollar Index declined by around 0.2% over the week as a whole, the currency strengthened during several key trading sessions alongside rising bond yields, adding further pressure on dollar-denominated precious metals.
Correction Following a Historic Rally
The latest weekly decline represents a continuation of the broader correction that followed silver's exceptional rally in January.
Silver opened 2026 at around $72 per ounce before surging to a record high of approximately $121.64 on January 29, delivering gains of nearly 68% in less than one month.
The rally was fueled by strong investment inflows, speculative trading, concerns over physical supply availability, uncertainty surrounding trade tariffs, and shifting flows of silver between major global markets.
However, the rapid rise pushed prices to exceptionally high levels, triggering widespread profit-taking and the liquidation of speculative positions, particularly given the relatively small size of the silver market compared with gold.
Silver has since retreated from its record high to around $56 per ounce, representing a decline of approximately 54% from the peak and around 22% since the beginning of the year.
In Egypt, 999 fine silver began the year at approximately EGP 125 per gram before climbing to EGP 210 at the end of January. It has since fallen to around EGP 98 per gram, representing a decline of roughly 53% from the peak and approximately 22% year-to-date.
Why Did Silver Decline by Only EGP 2 in Egypt?
The decline in Egyptian silver prices was significantly smaller than the global drop, mainly because of the appreciation of the U.S. dollar against the Egyptian pound and the persistence of a local market premium, both of which helped cushion the impact of lower international prices.
Based on a global silver price of around $56 per ounce and an exchange rate of EGP 50.65 per U.S. dollar, the theoretical value of 999 silver would be approximately EGP 91.2 per gram. However, the domestic market price remained around EGP 98 per gram.
The difference of approximately EGP 6.8 per gram reflects a local premium associated with supply costs, trading conditions, and domestic market dynamics.
The stronger dollar together with the widening gap between theoretical and actual domestic prices absorbed much of the international decline, limiting the loss in the Egyptian market to only around EGP 2 per gram.
Silver prices in Egypt are therefore not determined solely by movements in the international market but are based on a combination of global silver prices, the U.S. dollar exchange rate, and the local market premium.
Industrial Demand Weakens While Market Deficit Persists
Silver remains closely tied to industrial activity due to its widespread use in electronics, solar energy, electric vehicles, power infrastructure, and data centers.
According to projections from the Silver Institute, total global silver demand is expected to remain broadly stable during 2026 compared with the previous year, as stronger investment demand offsets weaker consumption in industrial applications, jewellery, and silverware.
Industrial demand is projected to decline by around 2% to approximately 650 million ounces (around 20.2 thousand metric tonnes), marking the lowest level in four years.
The decline is expected to be driven primarily by the solar energy sector, where manufacturers continue reducing the amount of silver used in photovoltaic cells and substituting alternative materials to lower production costs, despite continued growth in demand from artificial intelligence data centers, electric vehicles, electronics, and power grid infrastructure.
Demand for silver jewellery is expected to decline by more than 9% to around 178 million ounces, while silverware demand is projected to fall by approximately 17%, particularly as higher prices weigh on consumer purchases in India.
By contrast, investment demand for silver bars and coins is expected to increase by around 20% to approximately 227 million ounces, supported by renewed investor interest in Western markets and continued strong demand in India.
On the supply side, global silver supply is projected to rise by approximately 1.5% to around 1.05 billion ounces (roughly 32.7 thousand metric tonnes), the highest level in a decade.
Mine production is expected to increase by around 1% to approximately 820 million ounces, while recycled silver supply is forecast to rise by about 7%, surpassing 200 million ounces for the first time since 2012.
Despite higher supply, global production is still expected to remain below total demand, leaving the silver market with a deficit of approximately 67 million ounces (around 2.1 thousand metric tonnes) during 2026. This would mark the sixth consecutive year in which global demand exceeds supply.
The ongoing supply deficit is expected to provide medium- and long-term support for silver prices, although it does not eliminate the potential for short-term price declines driven by interest rates, the U.S. dollar, investment funds, and speculative trading.
International Outlook
International institutions continue to expect elevated volatility in silver prices throughout the remainder of 2026, while forecasting average annual prices above current market levels.
JPMorgan expects silver to average around $81 per ounce during 2026, although the bank notes that achieving this level will depend on sustained investment flows and continued demand growth.
The average forecast among analysts participating in the London Bullion Market Association (LBMA) annual survey stands at approximately $79.57 per ounce, compared with an average market price of around $40.21 during 2025.
Forecasts range widely between $42 and $165 per ounce, highlighting the unusually high level of uncertainty surrounding silver's price outlook this year.
These forecasts were published at the beginning of the year, before the full correction that followed January's record highs. As such, they should not be interpreted as expectations for an immediate return to those price levels but rather as annual average estimates that incorporate the exceptionally high prices recorded earlier in the year.
The World Bank noted that silver prices rose by around 55% during the first quarter of 2026 before declining by approximately 11% in the second quarter. Even so, the average price during the first half of the year remained roughly double the average recorded throughout 2025.
The World Bank also expects its precious metals price index—which includes gold, silver, and platinum—to increase by around 42% during 2026 before easing by approximately 8% in 2027.
Looking ahead, silver's performance is expected to remain closely linked to U.S. interest rate expectations, movements in the U.S. dollar, and trends in both industrial and investment demand, while the persistent supply deficit should continue to provide structural support for prices over the longer term.
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