Silver Slips Amid Easing Tensions and Investor Shift Toward Bonds

Silver prices in the local Egyptian market declined by 1.5% over the past week, mirroring a marginal global drop of 0.03% in ounce prices. This pullback comes amid easing geopolitical tensions and rising U.S. bond yields.

The price of 800-grade silver opened the week at EGP 51.25 per gram and closed at EGP 50.50, down by EGP 0.75. On the global front, silver opened at $35.93 per ounce, briefly touched $36.83, and ended the week at $35.92—marking a $0.01 drop.

As of the latest quotes, the local market saw 800-grade silver at EGP 51.25 per gram, 999-grade at EGP 63, and 925-grade at EGP 58.50. A silver pound (925-grade) was priced at EGP 468.

The price retreat followed reports of progress in ceasefire talks between Israel and Iran, which reduced demand for safe-haven assets and ended a multi-day rally. Despite pulling back from 13-year highs, silver still maintains gains exceeding 20% since the beginning of the year, suggesting a market repricing rather than a full reversal of the bullish trend.

The downturn was driven by declining geopolitical risks, as de-escalation talks between Israel and Iran dampened investor appetite for defensive assets like silver, which had previously rallied by nearly 30% during the first half of 2025.

This shift in investor sentiment forced funds to rebalance their positions after losing one of the key catalysts for silver’s recent surge.

Meanwhile, results from the U.S. Federal Reserve's 2025 stress tests showed that 22 major American banks maintain strong capital positions. This eased concerns about financial sector stability, further weakening demand for metals as crisis hedges.

Expectations for a Fed rate cut have also diminished, with markets currently pricing in only a 25% probability of a rate reduction in July—despite pressure from former President Trump. This signals a more hawkish monetary stance that reduces silver’s appeal as a non-yielding asset.

Although the U.S. dollar index declined slightly, 10-year Treasury yields surged to 4.275%, boosting the attractiveness of fixed-income assets over precious metals. The rise in real yields represents an opportunity cost for holding silver, prompting many investors to shift toward bonds—especially in the absence of strong downward pressure on the dollar.

Despite the recent drop, silver remains one of 2025’s strongest performers, supported by several structural factors: record-high gold prices, which historically pull silver upward due to their close correlation; a persistent supply deficit, marking the fifth consecutive year of market shortage; and surging industrial demand, particularly from the green technology and electronics sectors, alongside renewed safe-haven buying amid continued geopolitical and economic uncertainty.

Analysts at Citibank expect silver prices to continue climbing, potentially reaching $40 per ounce within 6 to 12 months and even hitting $46 by Q3 2025, driven by supply shortfalls and robust industrial momentum.

Ultimately, silver’s performance will hinge on the path of U.S. monetary policy and developments in the Middle East. Any renewed escalation or a dovish pivot by the Federal Reserve could reignite bullish momentum for the white metal.