Silver Retreats Locally by 4.6% in a Week Amidst Severe Global Pressures

Silver prices in local markets recorded a 4.6% decline during last week’s trading, coinciding with a drop of approximately 9% in the price per ounce on the global exchange. This decline was influenced by the Chicago Mercantile Exchange’s (CME) decision to raise trading margins for dealers in precious metals contracts, according to a report issued by the “Safe Haven” Center.

The report explained that the price of a gram of 999 purity silver fell from 131 EGP to 125 EGP, while 925 purity declined to 116 EGP, and 800 purity dropped to 100 EGP. Meanwhile, the price of the silver pound fell to 928 EGP.

On the global front, silver prices retreated by about $7.27 per ounce during the week. Trading opened at the $79.27 level before closing near $72 per ounce.

Despite the weekly decline, silver achieved strong gains in the local market during 2025. Prices rose by 145% (an increase of 74 EGP). The 999 purity gram opened the year’s trading at 51 EGP, touched a high of 136 EGP, before ending the year at 125 EGP. Additionally, 925 purity recorded about 116 EGP, 800 purity about 100 EGP, and the silver pound reached 928 EGP.

Globally, silver prices rose by 148% during 2025, an increase of about $43 per ounce. Trading began at the $29 level, reaching a historic peak of $84, before concluding the year near $72 per ounce.

The report noted that the Chicago Mercantile Exchange's announcement raising the trading margin on precious metals futures contracts for the second time in three days caused a shock to markets in the final session of 2025. This led to a sharp drop in silver prices after they had recorded a historic high of $84 per ounce.

Although silver is not traditionally classified as a monetary currency, analysts believe it is a candidate to play a pivotal role in the evolution of the global economy, making it a strategic asset in financial markets in the coming phase.

These analysts anticipate increasing competition between Western and Eastern markets over basic commodities, with silver emerging as a major repricing tool in this conflict. This premise is based on historical background; from the mid-16th century to the early 19th century, China was the world's largest economy, absorbing between 30% and 50% of global silver production, which formed the backbone of the Chinese monetary, tax, and trade systems at the time.

Currently, China seeks to strengthen its control over silver supply chains by imposing export restrictions during the new year. China is the second-largest global producer of silver, as well as a major player in refining and exporting operations, with the fundamental difference being its current entrenched status as a major economic and military power.

These restrictions come at a time when the silver market is suffering from increasing imbalances in supply chains and liquidity. Strong industrial demand over the past five years has led to a significant deficit in supply, causing a notable depletion of available inventories.

The growing demand for silver is attributed to the global shift towards electrification and artificial intelligence, with industrial demand reaching a record level of approximately 680 million ounces in 2024.

Solar energy is the main driver of this demand, consuming over 200 million ounces annually, with expectations to exceed 450 million ounces by 2030. This is driven by increasing reliance on renewable energy to power digital infrastructures and AI, alongside silver's superiority in electrical conductivity and the difficulty of finding substitutes.

At the same time, renewed investment demand, particularly from India, has contributed to increased pressure on physical silver stocks, at a time when supply is unlikely to keep pace with growing demand in the near term.

The report notes that about 72% of global silver supply comes as a by-product of mining other metals like copper, lead, zinc, and gold. This limits the ability to increase production directly, especially given the scarcity of primary silver deposits and the stability of global supply, which has seen no significant actual growth for about 25 years.

Given these factors, it is likely that a state of relative scarcity will persist in the market, with spot prices remaining higher than futures prices, as investors pay price premiums to obtain the physical metal.

While futures markets on “COMEX” may witness a degree of relative stability, the real physical market, especially the London Over-the-Counter (OTC) market, faces severe disruptions considered the deepest in decades.

The report concludes that the market is currently paying high premiums driven by anxiety over supply shortages. There are indications that the silver crisis which peaked in October 2025—with a sharp rise in lease rates to about 40%—was merely an early warning, while Chinese export restrictions represent a more severe blow to the markets.

Estimates suggest that fundamental factors support silver's prospects in 2026 and beyond, given declining London stocks, inelastic demand for solar energy, the dominance of secondary production on the supply side, the presence of speculators unaware of the market's tightness, alongside a major economic power moving to stockpile silver as a strategic asset.