HSBC has increased its silver price forecasts for both 2026 and 2027, although the bank continues to expect limited upside for the precious metal over the medium term.
HSBC now projects silver will average $75 per troy ounce in 2026 and $68 per ounce in 2027, compared with previous forecasts of $68.25 and $57, respectively.
Silver Rally Fueled by Safe-Haven Demand and Tight Supply
Silver surged to a record nominal high of $121 per ounce in late January, supported by soaring gold prices, constrained supply conditions and strong safe-haven demand linked to tariff concerns and geopolitical tensions.
The metal later pulled back sharply to around $64 per ounce in early February following a conflict-driven rise in the U.S. dollar and weakness in gold prices, before recovering to trade above $86 per ounce.
HSBC Sees Smaller Supply Deficits Ahead
Despite raising its price outlook, HSBC maintained a cautious stance, arguing that shrinking supply deficits and softer industrial and jewellery demand are likely to prevent sustained gains.
The bank expects the global silver market deficit to narrow to 73 million ounces in 2026 from 143 million ounces in 2025, before tightening further to 25 million ounces in 2027 as mine production and recycling supply increase.
“Moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” said James Steel, chief precious metals analyst at HSBC. The bank expects prices to weaken during the second half of both 2026 and 2027.
Industrial and Jewellery Demand Expected to Ease
Industrial demand, which accounts for more than half of global silver consumption, declined to 657 million ounces in 2025 from a record 679 million ounces the previous year.
HSBC said manufacturers have increasingly sought to reduce or substitute silver usage in response to elevated prices, and the bank expects that trend to continue.
The bank forecasts industrial silver demand will decline further to 642 million ounces in 2026 and 618 million ounces in 2027. Jewellery demand is also projected to fall to 157 million ounces this year from 189 million ounces in 2025.
Supply Growth Seen Supporting Market Rebalancing
On the supply side, HSBC expects mine production to remain broadly unchanged at 848 million ounces in 2026 before rising to 868 million ounces in 2027.
Recycling supply is forecast to increase to 216 million ounces this year from 197 million ounces in 2025.
Dollar Weakness and Geopolitics Could Offer Support
James Steel said expectations for a weaker U.S. dollar and ongoing geopolitical uncertainty could continue to provide some support for silver prices.
However, he cautioned that “the gold:silver ratio is likely to widen, allowing silver to ease even if gold rallies.”
HSBC set year-end silver price targets of $70 per ounce for 2026 and $65 per ounce for 2027.