The “Safe Haven Center” reported that silver prices in local markets fell by 5% during the week, influenced by a 4% drop in the global ounce price, amid rising oil prices and the U.S. dollar trading near a four-month high, following President Donald Trump’s 30-day extension of sanctions on Russian oil.
The report indicated that the 999-grade silver gram lost around 7 Egyptian pounds in one week, starting at 145 pounds and closing near 138 pounds. The 925-grade silver gram reached approximately 128 pounds, while the 800-grade silver gram recorded about 111 pounds. The silver pound remained steady at 1,024 pounds. Globally, the ounce declined from $84 at the start of the week to about $80.5.
Impact of Economic and Geopolitical Factors
Rising and stable oil prices are affecting the U.S. dollar exchange rate, despite market expectations of interest rate cuts by the Federal Reserve. Although market sentiment is positive, it remains fragile, with U.S. stocks recording modest gains between 0.40% and 0.43%. Economic data showed a slowdown in U.S. growth following a 43-day government shutdown, while inflation remained high, according to the core Personal Consumption Expenditures (PCE) index.
The second estimate of U.S. GDP for Q4 2025 dropped from 1.4% in the preliminary reading to 0.7% year-on-year, while the Federal Reserve’s preferred inflation indicator remained at 3.1% in January. The headline figure slightly decreased from 2.9% to 2.8% year-on-year. Following these data, investors increased expectations for rate cuts in 2026.
Geopolitically, ongoing conflicts in the Middle East continue to affect markets, with West Texas Intermediate crude reaching its highest level this year at around $113 per barrel, pushing gasoline prices up by more than 20% over the past two weeks. President Trump also announced strict measures against Iran, following the partial 30-day exemption from purchasing sanctioned Russian oil, keeping traders’ attention focused on geopolitical developments ahead of the Federal Reserve meeting on March 17–18.
Severe Fluctuations in the Silver Market
Silver has experienced sharp price shifts over recent weeks, starting with a steep decline at the end of January, followed by a notable recovery in February, and entering a new downtrend in early March. These movements caused confusion among investors, especially as major financial institutions maintained their core assessments of the metal.
Silver reached a record high of $121.64 per ounce on January 29 before collapsing rapidly due to the nomination of Kevin Warsh to chair the Federal Reserve and increased margin requirements on the Chicago Mercantile Exchange, triggering forced selling. As a result, silver contracts dropped 31.4% in a single day on January 30, marking the largest daily decline since the March 1980 silver crisis, ending the previous uptrend and initiating a rebalancing phase influenced by liquidity and technical factors.
Recovery in February Followed by Another Correction
In February, silver gradually recovered as selling pressure eased and buyers returned, rising over 10% during the month to reach approximately $95.85 per ounce in early March, regaining much of its previous losses. However, the recovery was short-lived. In the first week of March, silver faced a second correction, losing around 10% over 48 hours and falling back to the low $80s per ounce, pressured by a stronger U.S. dollar and diminished expectations for interest rate cuts.
Impact on Other Markets
Early 2026 saw severe volatility in silver markets affecting cash flows for Chinese lead processors, reducing their appetite for lead concentrates. Rising margin requirements and financing costs on COMEX and SHFE intensified liquidity pressures, forcing some market participants to liquidate positions. Nevertheless, the lead concentrate market remains structurally tight, and buying is expected to recover once silver prices stabilize.
U.S. Treasury yields also rose, with the 10-year bond yield reaching 4.287%, adding further pressure on a non-yielding metal.
Major Financial Institutions Maintain Long-Term Forecasts
Despite intense volatility, major banks have not changed their long-term silver forecasts. One leading U.S. investment bank expects an average price of $81 per ounce in 2026, while a major European bank sees silver potentially reaching $100 by year-end. A global banking group has a more optimistic view, targeting $150 per ounce in Q2 2026.
These forecasts are supported by continued supply deficits and strong industrial demand from the solar energy, electronics, and electric transition sectors.
Silver Market Between Structural Deficit and Financial Volatility
Recent developments show that the silver market is at a delicate balance point. On one hand, recent declines reveal the metal’s sensitivity to dollar movements, interest rate expectations, and futures market mechanisms. On the other hand, major financial institutions’ core outlooks remain unchanged, with no adjustments to price forecasts or supply deficit assumptions.
Thus, the market may simply be experiencing a period of heightened volatility within a long-term upward trend, rather than a fundamental shift in silver’s underlying market fundamentals.
Follow the latest news on Google News
