HSBC has revised higher its silver price outlook for 2026 and 2027, though the bank continues to believe the metal’s upside potential could remain constrained over the longer term.
The bank now forecasts average silver prices of $75 per troy ounce in 2026 and $68 per ounce in 2027, compared with earlier projections of $68.25 and $57.
Record Rally Driven by Safe-Haven Buying
Silver climbed to an all-time nominal high of $121 per ounce in late January as investors piled into safe-haven assets amid geopolitical tensions, tariff concerns and surging gold prices. Tight market conditions also contributed to the rally.
Prices later dropped sharply to around $64 per ounce in early February after a stronger U.S. dollar and weaker gold prices pressured the market, although silver later rebounded to above $86 per ounce.
HSBC Expects Market Deficits to Shrink
Despite raising its forecasts, HSBC said narrowing supply shortages and weaker end-market demand should limit the possibility of prolonged price spikes.
The bank estimates that the global silver deficit will decline from 143 million ounces in 2025 to 73 million ounces in 2026, before narrowing further to 25 million ounces in 2027 as mining activity and recycling volumes increase.
“Moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” said James Steel, HSBC’s chief precious metals analyst.
Industrial Demand Seen Softening Further
Industrial usage, which represents the largest component of silver demand, fell to 657 million ounces in 2025 from a record 679 million ounces a year earlier.
HSBC said manufacturers are increasingly attempting to reduce silver usage or switch to alternative materials because of elevated prices, a trend the bank expects to continue in the coming years.
The bank projects industrial demand will ease to 642 million ounces in 2026 and 618 million ounces in 2027, while jewellery demand is expected to decline to 157 million ounces from 189 million ounces.
Supply Growth May Help Stabilize the Market
HSBC expects mine production to remain relatively stable at 848 million ounces in 2026 before increasing to 868 million ounces in 2027.
Recycled silver supply is also projected to rise, reaching 216 million ounces this year compared with 197 million ounces in 2025.
Dollar Outlook and Geopolitical Risks Could Still Support Prices
According to James Steel, expectations for a softer dollar and ongoing geopolitical uncertainty may continue to provide some support for silver prices.
Still, he warned that “the gold:silver ratio is likely to widen, allowing silver to ease even if gold rallies.”
HSBC’s year-end silver targets stand at $70 per ounce for 2026 and $65 per ounce for 2027.