HSBC Sees Silver Rise from Gold Strength, Lifts Forecast
The comments below are an edited and abridged synopsis of an article by Staff Writer, Northern Miner
Silver is poised to benefit from ongoing strength in the gold market, with HSBC raising its silver price outlook for 2025 through 2027. The bank sees the white metal supported by gold’s performance, investor demand, and potential monetary easing in the US.
As of Wednesday afternoon, silver traded at $38.46 per ounce. Gold, one of this year’s top-performing commodities, has risen nearly 30% year-to-date, hitting a record high of $3,500 per ounce in April during heightened global trade tensions. This surge prompted investors to flock to gold, with silver following closely due to its status as a cheaper alternative. In fact, silver’s percentage gains have outpaced gold’s, especially in June, when the price spiked to its highest level since 2011.
HSBC analysts describe silver as being pulled higher by gold’s “strong gravitational force,” rather than solely by its own market fundamentals. With potential tailwinds ahead—notably a possible US interest rate cut in September—the bank has significantly revised its silver price outlook.
For 2025, HSBC now projects an average silver price of $35.14 per ounce, up from $30.28. The 2026 forecast has been lifted to $33.96 per ounce, and the 2027 projection to $31.79 per ounce. These adjustments reflect expectations of continued support from the gold price and shifting macroeconomic conditions.
On the demand side, industrial use is expected to soften slightly in 2025 following four years of record-high growth. However, this decline is expected to be limited, with a rebound anticipated in 2026. Key drivers will include the photovoltaic sector and electronics manufacturing, both of which rely heavily on silver.
Conversely, jewellery and silverware demand is expected to weaken further as high prices deter buyers. Coin and bar demand is also likely to remain subdued, impacted by earlier strong buying and elevated market prices.
From a supply perspective, HSBC forecasts a modest increase in global mine production over the coming years. This is expected to gradually narrow the global silver market deficit, though shortages will persist in the medium term.
According to the bank’s supply-demand model, the silver deficit is projected to widen to 206 million ounces in 2025, compared to 167 million ounces in 2024. However, this gap is expected to narrow significantly in 2026, reaching 126 million ounces. This transition reflects both supply growth and a gradual cooling in certain segments of demand.
In summary, HSBC’s upgraded silver price outlook is anchored in the close correlation between silver and gold prices, ongoing safe-haven demand, and anticipated macroeconomic developments such as potential interest rate cuts. While industrial demand patterns and mine supply dynamics will shape the market, the gravitational pull of gold remains the most immediate driver. Over the next three years, silver is expected to maintain elevated price levels, benefiting from both structural and cyclical factors in the global precious metals market.
