Silver Surges to Two-Week High Amid US Rate Cut Expectations

Silver prices recorded a significant rise in both local markets and global exchanges during mid-day trading on Wednesday, touching their highest levels in two weeks. This upward momentum is driven by growing expectations that the US Federal Reserve will cut interest rates at its upcoming meeting in December, according to a report by the "Safe Haven" Center.

Market Performance (Local & Global)

Local Market (Egypt): Silver grams saw an upward movement.

800 Fineness: Rose from 66.5 to 68 EGP.

925 Fineness: reached approximately 79 EGP.

999 Fineness: reached 85 EGP.

The Silver Pound: Stabilized at 632 EGP.

Global Market: The ounce jumped by approximately $3, opening trading at $50 and closing at $53.

Economic Drivers of the Rally

This positive momentum is attributed to several key factors enhancing silver’s appeal as an investment asset:

Weak US Data: Disappointing economic indicators—specifically retail sales slowing to 0.2% in October, declining consumer confidence, and weak private sector employment—have strengthened the argument for ending the policy of monetary tightening.

Interest Rate Expectations: Markets are currently pricing in an over 84% probability of a 25 basis point rate cut in December. This reduces the opportunity cost of holding non-yielding metals.

Bond Yields: A decline in US Treasury yields has helped channel liquidity toward precious metals.

Supply, Demand, and Risks

Supporting Factors: Silver benefits from its dual status: as a "safe haven" hedge against inflation and geopolitical instability, and as a vital component in the industrial sector (particularly technology and energy). Additionally, a supply deficit relative to demand, caused by production limitations and a challenging mining climate, is adding further upward pressure on prices.

Risk Factors: Despite the bullish trend, silver remains susceptible to strong volatility due to its close correlation with industrial activity. This makes it more sensitive than gold to potential economic slowdowns.

Conclusion: Silver is expected to maintain its upward momentum in the near term amidst continuing global economic uncertainty. However, its future trajectory remains tethered to macroeconomic shifts, central bank policies, and fluctuations in the US Dollar.