Silver Prices Rise 4% Locally and 2% Globally in May on Strong Industrial and Investment Demand

Silver prices rose in both local and global markets during May, supported by continued industrial and investment demand despite ongoing geopolitical and economic uncertainty, according to a report issued by the Marsad Al Dahab for Economic Studies.

The report noted that local silver prices increased by 4% during the month, while global silver prices gained approximately 2%, reflecting resilient investor interest and steady industrial consumption.

Silver 999 recorded a gain of around EGP 5 per gram during May. The metal opened the month at EGP 127 per gram, reached a monthly high of EGP 142, and closed at EGP 133 per gram.

Meanwhile, silver prices on international markets posted modest gains, with the metal opening at $73.5 per ounce, climbing to a monthly high of $89, before ending May at around $75 per ounce.

Silver 925 was trading at approximately EGP 123 per gram, while Silver 800 stood near EGP 107 per gram. The silver pound coin reached EGP 985.

The report highlighted that domestic silver prices remain roughly EGP 3.5 per gram below their equivalent international value when calculated using the official exchange rate announced by the Central Bank of Egypt. This reflects relatively subdued local demand compared with movements in global markets.

Silver continues to benefit from its dual role as both a precious investment asset and an essential industrial metal. Unlike gold, whose demand is largely investment-driven, silver enjoys additional support from growing consumption in solar energy, electronics, electric vehicles, and advanced technology industries.

Market performance during May was heavily influenced by expectations surrounding U.S. monetary policy. Investors closely monitored economic indicators for clues regarding the Federal Reserve’s future interest-rate decisions.

Recent U.S. income and spending data showed that inflationary pressures remain elevated. The Personal Consumption Expenditures (PCE) Price Index increased by 0.4% month-on-month and 3.8% year-on-year, while Core PCE rose 0.2% monthly and 3.3% annually. These figures reinforced expectations that the Federal Reserve may keep interest rates elevated for a longer period.

Higher interest rates typically weigh on precious metals by increasing the attractiveness of yield-bearing assets. However, periods of weakness in the U.S. dollar during the month helped offset some of these pressures and provided support for both gold and silver prices.

Investors also monitored geopolitical developments in the Middle East, particularly discussions surrounding a possible easing of tensions between the United States and Iran. These developments influenced the U.S. dollar, energy markets, and overall commodity sentiment, contributing to heightened volatility across precious metals markets.

Silver continued to outperform gold on a monthly basis, supported by sustained industrial demand and expectations of continued growth in technology-related consumption. The metal's unique position as both a monetary and industrial asset has allowed it to maintain investor interest despite broader economic uncertainties.

The report noted that silver remains within a historically volatile trading range after experiencing significant gains over the past year, followed by periods of correction and profit-taking. As a result, silver remains highly sensitive to changes in global economic conditions, monetary policy expectations, and investor sentiment.

Looking ahead, market participants are expected to remain focused on upcoming U.S. inflation data, Federal Reserve policy signals, geopolitical developments, and movements in the U.S. dollar, all of which are likely to remain key drivers of silver prices in both local and international markets.