Silver Records Second-Largest Weekly Loss Amid Monetary Policy Pressures

The Safe Haven Center announced that silver prices in the local market declined by about 7% during last week’s trading, affected by a 16% drop in the ounce on the global exchange, marking the second-largest weekly loss since the 17.39% decline recorded on January 30. The decline came as U.S. Treasury yields rose, prompting investors to shift capital from precious metals to higher-yielding assets.

This came amid the ongoing U.S.–Israeli–Iranian conflict, which has increased inflation expectations and reduced the likelihood of interest rate cuts in the near term, putting pressure on gold and silver prices.

In the local market, the price of 999 silver fell by about 10 Egyptian pounds over one week, starting trading at 138 pounds and closing at 128 pounds. Meanwhile, 925 silver recorded around 119 pounds per gram, 800 silver recorded approximately 103 pounds per gram, and the silver pound coin recorded around 948 pounds.

Globally, silver fell from $80.5 per ounce at the beginning of the week to around $68 per ounce by the end of the week.

The year 2026 has been extremely volatile for silver prices, which recorded their all-time high at $121.62 per ounce on January 29, 2026, before losing nearly half of their value and dropping to $64 per ounce by February 6, marking one of the fastest corrections in the precious metals market.

Silver prices came under pressure in global markets due to several factors, most notably the strength of the U.S. dollar and rising U.S. Treasury yields, in addition to geopolitical tensions and inflation risks, as well as profit-taking by investors following previous strong gains, which increased selling pressure on precious metals.

A stronger dollar reduces demand for gold and silver because they become more expensive for holders of other currencies, while higher interest rates reduce the attractiveness of precious metals since they do not provide yields like bonds.

Despite the current pressure, long-term outlooks for silver and gold remain supported by several factors, including inflation risks, investment demand, central bank purchases, and supply issues, particularly in the silver market, which could support prices in the long term if monetary tightening slows or global economic risks increase.

Market expectations indicate that gold and silver prices may remain under pressure in the short term due to interest rate expectations and currency strength. Prices may stay under pressure if yields remain high and the dollar continues to rise. However, in the long term, both metals may receive support from inflation risks, central bank demand, and global economic uncertainty. A shift in monetary policy or interest rate cuts could push gold and silver prices higher again.

In a related development, Chinese customs data showed that China’s silver imports reached their highest level in eight years during the first two months of 2026. China imported more than 790 tons of silver in January and February, with February alone recording a yearly record of 470 tons of imports.

Strong domestic demand pushed local silver prices significantly above global prices, depleted domestic inventories, and triggered increased foreign purchases. Analysts also warned that new Chinese export controls on silver in 2026, which now require official approval for silver export shipments, could increase market volatility and fragment the global silver market into regional markets, reducing liquidity and amplifying price volatility.

Analysts indicated that these disruptions do not reflect a global shortage of silver, but rather local supply bottlenecks that keep the market distorted and more volatile.

As for gold, the metal remained under pressure after the Federal Reserve decided to keep interest rates unchanged while signaling ongoing inflation risks due to rising oil prices, reinforcing expectations that interest rates will remain higher for longer, which negatively impacted gold prices.

The sharp rise in the U.S. dollar and Treasury yields overshadowed safe-haven demand for gold, as investors prepared for tighter financial conditions. Oil prices also rose to levels near four-year highs following continued attacks on energy infrastructure in the Middle East, increasing concerns about supply disruptions and inflation.

In response, global central banks adopted a cautious stance. The Reserve Bank of Australia raised interest rates, while the U.S. Federal Reserve, the European Central Bank, the Swiss National Bank, and the Bank of Japan kept rates unchanged, signaling limited monetary easing in the near term.

Additionally, market participants now expect the Bank of England to raise interest rates twice this year, reinforcing expectations of tighter monetary policy and limiting gold’s upside potential in the short term despite ongoing geopolitical risks.