Silver prices in local and international markets surged during trading on Monday, setting new record levels, the highest in over four decades. This rally is driven by renewed US-China trade tensions, the ongoing US government shutdown, and increasing expectations for a US interest rate cut, according to a report from the "Safe Haven Center" for research.
The report clarified that the price of 800-karat silver per gram rose to EGP 74, while 925-karat silver recorded EGP 86, and 999-karat silver reached approximately EGP 93. The 925-karat silver pound remained stable at EGP 664.
Globally, the ounce of silver climbed to about $52, the highest level for silver since 1980, while gold surpassed the $4,100 per ounce barrier, setting a new record. This rise is attributed to increased safe-haven demand amidst the ongoing US government shutdown and trade tensions between Washington and Beijing.
London Liquidity Crisis Triggers Price Explosion
According to a Bloomberg report, a liquidity shortage in the London market exacerbated what is known as a "short squeeze" on silver positions, leading to an unprecedented surge in prices and triggering a wave of global searches for physical bullion to cover demand.
The report noted that the price gap between the London and New York markets prompted some traders to air-freight silver bars across the Atlantic to profit from the large price differential—an unusual step typically reserved only for gold due to the high cost of transportation.
US Government Shutdown Increases Uncertainty
This price surge comes as the US government shutdown enters its third week, following President Donald Trump's decision to furlough a number of federal employees, deepening the rift between Republicans and Democrats over the government budget.
Observers believe the shutdown is likely to continue, given the Democrats' adherence to their demands for an extension of health insurance subsidies and their refusal to vote to reopen the government without direct negotiation.
Escalation of US-China Trade Tensions
On the international front, the US administration showed cautious openness to negotiation with China, but considered Beijing's restrictions on rare-earth exports a "major obstacle" to dialogue.
China had recently announced new tariffs on US vessels and opened investigations against Qualcomm, raising fears of a renewed trade war that could impact global economic growth.
Oil Retreats as Trade War Worsens
US Nymex crude futures fell by more than $3 per barrel on Friday, recording their lowest level in four and a half months near $58, before slightly rebounding to $59.75.
The decline is attributed to fears of a slowdown in global demand due to the trade war, increased supply from OPEC and non-OPEC producers, and a reduction in the geopolitical risk premium following progress in negotiations for a truce in Gaza.
Positive Outlook for Silver with Limited Short-Term Risks
Goldman Sachs stated in a research note that silver prices are likely to rise in the medium term, supported by private investment flows and strong industrial demand, but warned of high volatility and short-term correction risks compared to gold.
In contrast, gold has risen by about 53% since the start of the year, supported by central bank purchases, increasing ETF investments, expectations of a US interest rate cut, and economic uncertainty resulting from tariffs and geopolitical tensions.
The CME FedWatch tool shows markets are anticipating a near-certain 25-basis-point rate cut in October, followed by a similar cut in December, while investors await Federal Reserve Chairman Jerome Powell's speech on Tuesday to confirm the direction.
Silver: The High-Beta Version of Gold
Saxo Bank stated in a research report that silver is now considered the "high-beta version of gold," meaning it moves in the same direction but with greater intensity in both gains and losses.
The bank predicted that silver would continue its ascent towards $100 per ounce by 2026, supported by industrial demand and the global transition to clean energy.
Analysts believe the $50 level represents a strong psychological barrier in the market, but it is not a final ceiling, especially with gold reaching $4,100 per ounce.
The Big Picture: Silver Returns to the Forefront of Metals
The "Safe Haven Center" affirms that silver is experiencing a new historical phase, where record industrial demand, a supply deficit, the clean energy transition, and a weak US dollar all converge.
At a time when investors traditionally turn to gold, silver today appears to be the strongest player in the precious metals scene for 2025, with expectations of further gains if accommodative monetary policies and global economic disruptions persist.
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