Silver Regains Its Shine Amid Rate Cut Bets and Growing Industrial Demand

In a week marked by sharp global market fluctuations, silver prices declined locally despite recording historic highs in July. The metal rebounded late in the week, supported by expectations of U.S. interest rate cuts and renewed investor appetite for precious metals as safe-haven assets amid economic and geopolitical uncertainty.

According to a report by the Safe Haven Research Center, the price of silver in Egypt fell from EGP 53 to EGP 52 per gram for 800-purity silver. The 999-purity silver was priced at EGP 65, while 925-purity stood at EGP 60 per gram, and the silver pound (925) reached EGP 480.

Globally, silver opened the week at $38 per ounce and closed at $36.96, under pressure from weak U.S. economic data and a volatile dollar.

Weak U.S. Jobs Data Revives Silver Momentum

Silver rebounded on Friday following the release of a disappointing U.S. nonfarm payroll report for July. The U.S. economy added only 73,000 jobs—far below expectations of 110,000. Additionally, June’s figures were sharply revised down to just 14,000 jobs from a previously reported 147,000. Unemployment rose to 4.2%, in line with expectations, while wage growth held steady at 0.3% month-on-month and 3.9% year-on-year.

These figures triggered a sharp selloff in the U.S. dollar and a drop in Treasury yields, reviving speculation that the Federal Reserve may cut interest rates as early as September. According to CME FedWatch Tool, the probability of a September rate cut surged to 82%, up from 37% before the data release—driving renewed demand for non-yielding assets like silver.

A Historic July: Silver Hits 13-Year High

Silver posted strong gains in July. Locally, 800-purity silver opened the month at EGP 50.50, peaked at a record EGP 54, and ended the month at EGP 52. Globally, silver opened the month at $36 per ounce and reached a high of $39.37—the highest level since September 2011—making it one of the year’s best-performing assets.

This rally reflects investors' shifting preferences toward silver amid mounting fears of a global economic slowdown and escalating trade tensions.

Industrial Demand Fuels Bullish Outlook

The report notes that rising industrial demand—especially from the solar energy, electric vehicle, and electronics sectors—is a major tailwind for silver, amid shrinking global supply and disrupted supply chains.

Citibank forecasts silver to reach $40 in the next 6–12 months, potentially exceeding $46 by Q3 2025. Furthermore, silver remains undervalued relative to gold, with the gold-to-silver ratio at 86, far above the historical average of 50–60. Should the ratio return to the mean, silver could surpass $63 per ounce, representing a 65% upside from current levels.

Silver as a Strategic Defensive Asset

The report underscores silver’s renewed appeal as a strategic asset in a global environment marked by inflationary pressures, geopolitical tension, and policy uncertainty. Though more volatile than gold, silver offers investors an accessible and affordable hedge with growth potential.

Egyptian Investors and the Future of Silver

As Egypt advances in its transition toward clean energy and electric mobility, silver is expected to play a pivotal role—not only industrially but also as a vehicle for wealth preservation. The report advises local investors to allocate at least 10% of their portfolios to silver, balancing growth and defensive strategies.

According to the Silver Institute, global silver demand is expected to surpass 1.2 billion ounces by 2025, driven by its critical role in green technologies, electronics, and clean transportation. Despite solid market fundamentals, silver remains highly sensitive to economic data and monetary policy decisions, which can drive short-term volatility.

With mounting concerns over currency depreciation, inflation, and global realignment toward sustainable energy, silver is no longer the "lesser metal"—it's emerging as a key investment opportunity for 2025 and beyond.