Silver Reaches Record Highs in Local and Global Markets

Silver prices rose in local markets on Saturday, coinciding with the global stock exchange's weekly holiday. This increase follows a strong 7% weekly gain in global prices, driven by a combination of factors, including a weaker U.S. dollar, rising industrial demand, and growing expectations of U.S. monetary policy easing.

According to a report from the "Safe Haven" Research Center, the price of 800-carat silver in the local market reached 60 EGP per gram, while 999-carat silver was 75 EGP per gram and 925-carat was 70 EGP. The price of a silver pound (925-carat) remained stable at 560 EGP.

Global Market Outlook

Globally, the price of an ounce of silver climbed from $43 to $46 during the week, reaching its highest level in 14 years. This surge was supported by increased investment in safe-haven assets and growing bets on continued U.S. interest rate cuts, which boosted the appeal of non-yielding precious metals like silver.

The report noted that silver touched the $46 per ounce level, with investors now focused on the historic target of $50. The current momentum suggests that the rally is still in its early stages, and the white metal has the potential to surpass its historical highs if current drivers persist.

Factors Driving the Rally

1. Weakening Dollar and Monetary Policy Expectations

The decline in the dollar's value is a key factor supporting silver's rise, as it encourages investors to hedge against currency fluctuations by moving into precious metals. With growing expectations of a rate cut, liquidity is shifting towards non-yielding assets like gold and silver.

However, Federal Reserve official Austan Goolsbee warned against rushing to cut rates, pointing to the continued strength of the U.S. labor market, which could limit the future momentum of precious metal prices.

2. Increasing Industrial Demand, Especially from Solar Energy

Silver is a strategic industrial metal used extensively in electronics and photovoltaic solar cells. With the accelerated transition to clean energy, demand for silver is increasing at an unprecedented rate. Data shows that the renewable energy and technology sectors have become a major driver of prices, making silver both a safe haven and an industrial asset.

3. Supply Deficit and Market Tightening

The report highlighted that the global silver market is suffering from a cumulative supply deficit due to slowing mine production compared to rising demand. Over the past five years, the cumulative deficit has reached about 800 million ounces, while the deficit for 2025 alone is expected to be 187 million ounces, which will put further upward pressure on prices.

4. The Gold-Silver Relationship

Silver often moves in parallel with gold and is considered a complement in investor portfolios. With gold reaching historic highs, silver has gained similar momentum, especially since it is more volatile and sensitive to economic changes.

Challenges and Risks

Resistance at $50 per Ounce: Analysts see this level as a significant psychological barrier. The market may see a price correction if silver fails to break past it steadily.

High Volatility: Silver is more volatile than gold and often experiences sharp pullbacks after strong rallies.

Sensitivity to Central Bank Policies: Any unexpected tightening of monetary policy or new U.S. rate hikes could reduce the appeal of metals as a safe haven.

Fluctuating Industrial Demand: A slowdown in the growth of the technology or renewable energy sectors could lead to a temporary drop in demand, putting pressure on prices.

Supply Changes: An increase in production or a rise in recycled scrap could alleviate the deficit and slow the upward momentum.

Silver's Role in the Global Economy

The report emphasized that silver has become a central element in the global economy, not just as an investment haven but also as a core industrial pillar in technology and renewable energy infrastructure. Emerging markets like India are driving demand for low-cost solar energy, which translates into higher industrial consumption of silver. Many countries have also started building domestic stockpiles of vital metals, including silver, as part of their industrial security policies, adding further pressure on the supply side.

Comparisons with Gold

Monetary Policy: The U.S. Federal Reserve recently cut its interest rate by 25 basis points to a range of 4.00%-4.25%, with expectations of further cuts before the end of the year, which reinforces the upward trend for metals.

Safe-Haven Demand: Escalating geopolitical tensions, especially the Russia-Ukraine war, have pushed investors to increase their holdings of gold and silver as assets to hedge against risks.

Future Expectations

If silver successfully breaks above the $50 per ounce level, we could see a new rally towards even higher historic levels. However, if it fails to break through, a limited correction is likely towards support levels between $42 and $44.

In any case, analysts expect that growing industrial demand and technological innovation will continue to support prices in the medium term, even if investment momentum temporarily slows down.