Silver could climb as high as $90 an ounce over the next six to 12 months, according to Citi, as stronger investor demand potentially outweighs a softer outlook for some industrial uses. The bank maintained its bullish price forecasts and expects easing geopolitical tensions and a less hawkish Federal Reserve to create a more favourable backdrop for the precious metal.
Citi maintains bullish silver targets
Citi reiterated its silver forecasts in a note to clients, maintaining a target of $75 per ounce over the next zero to three months and $90 per ounce over a six-to-12-month horizon.
Those projections compare with a spot silver price of approximately $65 per ounce.
The longer-term target would represent a substantial increase from current levels, with Citi expecting investment flows to become increasingly important in determining the direction of the market.
The bank anticipates a “continued recovery in investment demand” as monetary-policy and geopolitical pressures potentially begin to ease.
Hormuz de-escalation could support precious metals
Citi sees a possible easing of tensions surrounding the Strait of Hormuz as an important catalyst for silver.
The firm expects silver to “continue to track gold in direction with high beta,” meaning the metal could potentially deliver larger percentage moves when precious-metal prices rise.
That characteristic makes silver “an ideal upside play” if the Strait of Hormuz standoff reaches a rapid resolution, according to Citi.
The bank’s base case assumes that geopolitical conditions eventually de-escalate, potentially “as soon as September-December.”
Such an outcome could help reverse some of the macroeconomic pressures that have weighed on silver.
Less hawkish Fed could improve investment demand
Monetary policy is another major part of Citi’s bullish argument.
Silver has faced pressure from higher real yields and a strong U.S. dollar, both of which can reduce the relative attractiveness of precious metals.
Citi expects these headwinds to moderate if the Federal Reserve adopts a less hawkish stance.
A combination of lower real yields, reduced dollar strength and easing geopolitical uncertainty could encourage investors to increase their exposure to silver.
Under Citi’s outlook, those investment flows would become a more important driver of prices than changes in industrial consumption.
Solar demand faces structural slowdown
The bullish investment outlook comes despite potential weakness in one of silver’s major industrial markets.
Citi expects solar-related demand to face a structural slowdown as manufacturers continue reducing the quantity of silver required in photovoltaic cells, a process known as thrifting.
The increasing adoption of back-contact, or BC, solar-cell technology could further reduce silver intensity.
Citi believes BC technology could develop into a leading solar technology by 2028, accelerating the change in silver consumption patterns across the photovoltaic industry.
AI, 5G and EV demand remains supportive
Despite the expected slowdown in solar consumption, Citi continues to see resilient industrial demand from other technology-driven markets.
Artificial intelligence infrastructure, 5G networks and electric vehicles are expected to remain important sources of silver consumption.
These applications could help offset some of the pressure created by reduced silver use in solar manufacturing.
Citi consequently expects the global silver market to remain in deficit through 2027, providing an underlying fundamental source of support for prices.
Indian demand adds further support
Strong physical demand in India represents another positive factor in Citi’s outlook.
The bank highlighted a domestic silver premium of approximately 7%, indicating robust local demand relative to international prices.
Consumption could strengthen further during the fourth quarter as India’s festive and wedding season increases purchases.
Strong Indian buying could provide additional support at a time when Citi expects global investment demand to become increasingly influential.
Investment flows could drive silver towards $90
Citi’s bullish case ultimately rests on a transition in the forces driving the silver market.
While solar demand could weaken structurally, investment buying may become powerful enough to compensate, particularly if geopolitical tensions ease and Federal Reserve policy becomes less restrictive.
With the global market expected to remain in deficit through 2027 and technology-related demand from AI, 5G and electric vehicles remaining resilient, Citi sees conditions for silver to continue following gold while potentially producing larger percentage gains.
If that scenario develops as expected, the bank believes silver could rise to $75 per ounce in the near term before potentially reaching $90 over the following six to 12 months.