"Safe Haven": Calls for mass buying and expectations that silver will break the $100 barrier.
Waleed Farouk
Silver prices rose in local markets by 2.3% during last week's trading, with the ounce on the global stock exchange rising by 3%, amid geopolitical and economic uncertainty, according to a report by the Safe Haven Hub.
The report indicated that silver prices in local markets rose by one Egyptian pound during last week's trading, with the price of a gram of 800-karat silver opening at 44 Egyptian pounds and closing at 45 Egyptian pounds. Meanwhile, the price of an ounce on the global stock exchange fell by one dollar, opening at $33 and closing at $34.
It added that the price of a gram of 999-karat silver reached 56 Egyptian pounds, while the price of a gram of 925-karat silver reached approximately 52 Egyptian pounds, while the silver pound (925-karat) reached 416 Egyptian pounds. Silver reached a five-month high but fell back to around $34 by the close of trading on Friday, reaching $34.58 per ounce before retreating as investors took profits. The metal then surpassed $34.23, its all-time high from March 18.
Silver Rally
Silver remains the only major metal still trading below its all-time high of 1980, reinforcing speculation that prices are being manipulated and remain low, even as traditional catalysts such as rising inflation, increased physical demand, a supply deficit, and a massive surge in gold prices combine to support silver as well as gold. Silver has once again become the focus of a coordinated grassroots movement, this time dubbed "Silver Squeeze 2." This online campaign, which has gained widespread attention across social media platforms such as X, calls for a mass purchase of silver on March 31 to challenge what proponents describe as a "rigged" paper market. This strategy is reminiscent of the 2021 Reddit silver squeeze.
Reports indicate that trade tariffs would naturally drive up silver prices, especially given the surge in demand for silver, as large quantities of silver flow into New York from London.
The stock market's hold on silver prices is almost impossible to overstate. The futures market is currently experiencing a net supply shortage of approximately 223 million ounces, representing approximately 25% of annual mine supply. Meanwhile, the ratio of paper silver to physical silver is approximately 378 to one, far exceeding any other futures market for any metal or commodity. In 2021, retail investors attempted a similar move, with SLV ETF trading volumes increasing ninefold. Silver briefly jumped from $25 to $29.50, and the average price of silver rose 30 to 40% in just three days.
Silver has a sustained industrial demand, creating a deficit in the markets, alongside investment demand from individuals and institutions, confirming a sustained price increase like gold.
The amount of silver available for investment is now less than it was 10 years ago, and this could contribute to a greater and more sustained pressure. Industrial demand for silver now represents about 60% of annual usage, up from 50% a decade ago. According to the Silver Institute, solar power, electronics, and electric vehicles have contributed to this increase. Silver has been in a global supply deficit for four consecutive years, averaging 200 million ounces annually, according to Metals Focus. This deficit has not been offset by new mine supply, but rather by stockpiling from exchanges like the London Bullion Market Association (LBMA) and COMEX. LBMA stockpiles have fallen by 40 to 50% over the past few years, and much of this metal is being moved to private vaults in New York.
With growing calls for mass buying, silver is expected to hit $50, amid expectations that it will continue to break records and soon reach $100.
Trump Threats and Fed Warning
While President Trump's plans for tit-for-tat tariffs, scheduled to take effect on April 2, are widely expected to lead to higher import prices, economists estimate that the impact on inflation could exceed a full percentage point. While some Federal Reserve officials expect a temporary increase, others warn of prolonged pressure, increasing uncertainty about the fate of interest rates. Trump's tariff threats could add 1% to inflation, raising concerns that could push silver demand higher.
The Federal Reserve continues to face mixed signals, including moderate growth, strong consumer spending, and rising inflation expectations. While recent CPI figures have indicated slowing price growth, the outlook for personal consumption expenditures suggests the Fed has limited room to ease monetary policy. Federal Reserve spokespeople have described economic conditions as faltering, with the outlook clouded by policy risks and weak consumer confidence.
The U.S. Commerce Department reported Friday that the core personal consumption expenditures (PCE) index, which excludes volatile goods and energy prices and is the Fed's preferred inflation measure, rose 0.4% last month, compared to January's 0.3% increase. Consumer prices were higher than expected, with economists forecasting another 0.3% increase. Over the past 12 months, core inflation rose by 2.8%, compared to a revised 2.7% increase in January. Economists had expected an annual increase of 2.7%.
The report shows that inflation has become an integral part of the economy, even as overall inflation remains relatively stable.
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