Silver prices declined in the local market during last week’s trading, pressured by lower global prices, profit-taking activities, a stronger U.S. dollar, and easing geopolitical tensions, according to a report issued by the Safe Haven Center.
The report noted that 999-fine silver lost around EGP 20 per gram over the week, opening at EGP 170 and closing at EGP 150. Meanwhile, silver prices on global exchanges fell by about $7 per ounce, starting the week at $85 and ending near $78.
Prices for 925-fine silver recorded approximately EGP 139 per gram, while 800-fine silver stood near EGP 120 per gram. The price of a silver pound coin remained stable at EGP 1,112.
Global Selling Pressure and a Cautious Return of Demand
The report explained that silver faced selling pressure in global markets but managed to attract renewed demand as prices declined, amid a fresh shift toward safe-haven assets and renewed speculation over a more accommodative U.S. monetary policy in the period ahead.
The return of risk aversion across global markets has supported demand for precious metals, as investors closely monitor geopolitical tensions and sensitive diplomatic talks involving the United States. At the same time, signs of weakness in the U.S. labor market have strengthened expectations of interest rate cuts by the Federal Reserve, a structurally supportive factor for non-yielding assets such as silver.
Weak U.S. Data Supports Silver, While the Dollar Caps Gains
Recent U.S. economic data showed slowing employment momentum, reinforcing market bets on a more flexible monetary stance. Such expectations reduce the opportunity cost of holding silver and support its prices, particularly as some investors seek to diversify their precious metals exposure beyond gold.
However, silver’s upside remains partially capped by the strength of the U.S. dollar, which continues to hold onto part of its recent gains. A stronger dollar makes dollar-denominated metals more expensive for international buyers, warranting caution despite the generally positive medium-term outlook.
Sharp Volatility, but the Broader Trend Remains Bullish
Globally, silver has experienced a fresh wave of volatility, yet the broader trend remains bullish. After a sharp rally to $121 per ounce, prices underwent a strong correction to $64, triggering market concerns. This pullback, however, proved to be a natural response to historically extreme overbought conditions within a powerful uptrend.
Technical analysis points to a similar price pattern seen in 1979 and 1980, when the Relative Strength Index (RSI) surged above 90, signaling extreme overbought conditions. A comparable scenario emerged in 2026, necessitating a sharp correction that brought the RSI down to around 81.23, a level that remains relatively elevated.
Structural Support and Sustained Positive Momentum
Silver continues to draw support from rising safe-haven demand amid a renewed “risk-off” environment. While gold leads this shift, silver is benefiting from strong inflows as an alternative hedge, supported by its dual role as both an industrial metal and a safe-haven asset.
Concerns are also mounting over potential physical delivery bottlenecks on the COMEX, after registered silver inventories fell to approximately 103 million ounces, compared with open interest of nearly 429 million ounces, increasing the market’s sensitivity to any sudden surge in delivery demand.
Long-Term Technical Breakouts Reinforce the Bullish Outlook
Silver’s strength is further reflected in the silver-to-gold ratio, which has staged a strong recovery from a long-term support level not seen since 1992, forming a double-bottom pattern that signals improving relative performance versus gold.
Overall, the recent pullback in silver prices represents a healthy rebalancing following an aggressive rally. Macro and technical factors continue to support a bullish medium- to long-term outlook, underpinned by safe-haven demand, supply constraints, and expectations of looser monetary policy.
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