Silver prices climbed 1.63% on Wednesday amid broad US dollar weakness. Technically, the metal maintains an intact upward trend with potential to test $40/oz in the near term. Concurrently, HSBC has raised its silver price forecasts for 2025-2027, projecting the metal will benefit from gold’s strength in coming years.
Gold – among this year’s top-performing commodities with nearly 30% gains – hit a record $3,500/oz in April during peak global trade war tensions as investors flocked to the safe-haven asset. Silver, as gold’s cheaper alternative, rallied even more sharply. Its momentum accelerated in June, soaring to levels unseen since 2011.
HSBC analysts attribute silver’s surge primarily to its correlation with gold rather than fundamentals, noting record-high gold prices exert a “strong gravitational pull” on silver. Typically tracking gold’s moves due to shared safe-haven attributes, the Gold/Silver ratio (ounces of silver needed to buy one ounce of gold) indicates relative valuation. Investors often interpret a high ratio as silver being undervalued or gold overvalued.
Citing potential tailwinds like a September Fed rate cut, HSBC adjusted forecasts:
Industrial silver demand, after four years of record growth, will ease in 2025 but see limited decline. Key sectors like photovoltaics and electronics should drive recovery in 2026. Silver’s industrial applications remain extensive – particularly in massive Chinese and US industrial systems – where it’s consumed across multiple processes.
Per HSBC’s supply-demand model: 2025 silver deficit expected to widen to 206Moz from 167Moz in 2024；2026 deficit projected to narrow to 126Moz.
