HSBC sees silver benefiting from gold strength, lifts forecast

Silver is set to benefit from the underlying strength in the gold market in the coming years, says HSBC, as it lifts its price outlook for the metal from 2025 to 2027.

Gold has been one of this year’s top-performing commodities, rising by nearly 30% to date. In April, at the height of a full-blown global trade war, it hit a record high of $3,500/oz. as investors rushed to the safe-haven metal.

As a cheaper alternative to gold, silver also saw a substantial rally, with gains even surpassing that of gold. Momentum in silver picked up especially in the month of June, during which it spiked to levels not seen since 2011.

This rally, according to HSBC’s analysts, is due more to the metal’s relationship with gold than underlying fundamentals, as record-high gold prices a exerting a “strong gravitational pull” on its sister metal.

Silver outlook

Given the potential for further tailwinds this year, such as a US interest rate cut in September, the bank has raised its 2025 outlook for silver to $35.14/oz., up from $30.28/oz. previously. It also gave similar increases to the 2026 and 2027 forecasts, at $33.96/oz. and $31.79/oz. respectively.

While industrial demand for silver is set to ease in 2025 after four years of record-high growth, HSBC said the decline would likely be limited, and demand will pick up again in 2026 from 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, HSBC analysts added.

On the supply side, the bank expects global mine output to keep rising at a modest pace to bring the global market deficit down.

According to bank’s supply-demand model, while the silver deficit is likely to widen in 2025 to 206 million oz. from 167 million oz. last year, that is likely to shrink to 126 million oz. the year after.