(Reuters) -HSBC has lifted its silver price forecasts for 2025, 2026, and 2027, citing strong support from high gold prices and safe-haven demand in the face of geopolitical and economic uncertainty.
The bank now expects average silver prices of $35.14 per ounce in 2025, up from $30.28 previously, $33.96 in 2026, against an earlier forecast of $26.95, and $31.79 in 2027, versus $28.30 formerly.
While silver prices have surged, HSBC cautioned that the rally is “due more to silver’s relationship with gold than (to) underlying fundamentals”, with record-high gold exerting a “strong gravitational pull” on silver.
Spot gold prices are up 29% so far this year after hitting a record $3,500 per ounce in April with the U.S. and China in the midst of a full-blown trade war, which triggered moves into safe-haven assets.
HSBC said that after four years of record-high growth, industrial demand for silver may edge lower this year, although any declines are likely to be limited. It said demand would likely recover in 2026, driven by key sectors such as the photovoltaic industry and electronics.
However, jewellery and silverware demand is likely to weaken further due to high prices, while coin and bar demand has been undercut by previous robust purchases and high prices, the bank added.
On the supply side, silver mine output continues to rise at a modest pace, HSBC said.
The bank’s supply-demand model projects a silver deficit of 206 million ounces in 2025, widening from a 167 million ounce deficit in 2024. That is expected to narrow to 126 million ounces in 2026.
HSBC also said a weaker U.S. dollar this year, as forecast by HSBC research, is silver positive, while ongoing debates over Federal Reserve rate cuts and central bank policies could impact prices going forward.
(Reporting by Sherin Elizabeth Varghese and Noel John in Bengaluru; Editing by Jan Harvey)
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