Silver Records its Highest Levels in Four Decades, Supported by Trade Tensions and the US Government Shutdown

Silver prices continued their record ascent during today's Wednesday trading, registering historical levels not seen in over forty years. This surge was driven by renewed trade tensions between the United States and China, the ongoing US government shutdown, and escalating expectations of an interest rate cut by the US Federal Reserve, according to a report issued by the "Safe Haven" Research Center.

The report clarified that prices in the local market witnessed a notable increase: the price of a gram of 800-karat silver recorded approximately EGP 75, 925-karat silver was about EGP 87, while 999-karat reached nearly EGP 94, and the 925-karat Silver Pound stabilized at EGP 696.

Globally, silver continued its rise to reach approximately $53 per ounce, after touching the $54 level in early trading, which is the highest price silver has recorded in its modern history, amidst a clear supply shortage in global markets. Meanwhile, gold surpassed the $4200 per ounce barrier, also recording a new historical high.

According to reports from "Bloomberg" and "Reuters," the lack of liquidity in the London market exacerbated the phenomenon known as a "Short Squeeze" on silver positions, after a number of traders were forced to cover their short positions, which led to an unprecedented surge in prices.

The reports indicated that the price gap between the London and New York markets reached levels that prompted some traders to air-freight silver bars across the Atlantic to capitalize on the significant price difference—a rare step usually reserved for transporting gold due to its high cost.

This increase comes as the US government shutdown enters its third week, following US President Donald Trump's decision to furlough a number of federal employees, which deepened the dispute between Republicans and Democrats regarding the government budget. Observers believe that the continuation of this shutdown reinforces market fears of a potential economic slowdown, which pushes investors towards safe havens, primarily gold and silver.

The US administration also showed cautious openness to negotiating with China but described Beijing's restrictions on rare earth metal exports as a "major obstacle" to resuming trade dialogue. China had previously imposed additional tariffs on US vessels, raising fears of a return to the trade war between the world's two largest economies and its potential impact on global growth.

In this context, Bank of America raised its silver price forecast to $65 per ounce by 2026, with a targeted average of $56.25, attributing this to increasing investment flows directed towards the white metal and rising industrial demand in the solar energy and electronics sectors.

In contrast, Goldman Sachs warned of the possibility of the market experiencing short-term correction waves, noting that silver shows higher volatility than gold due to its reliance on industrial demand, which could be affected if global economic growth slows down.

For its part, Saxo Bank considered that silver has become the "high-beta version of gold," meaning it moves in the same direction but with greater intensity in gains and losses. The bank expects silver to continue its ascent towards $100 per ounce by 2026, supported by increasing industrial demand and the global shift towards clean energy.

Despite warnings of potential price corrections, analysts believe the general trend remains upward, supported by global inflationary concerns, declining confidence in stock markets, and strong bets on a US interest rate cut, which makes silver the ideal combination of industrial investment and a safe haven.