HSBC raises silver price forecast as gold strength exerts 'gravitational pull'

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Analysts at HSBC raised their silver price forecast for 2025, 2026, and 2027, citing strong support from high gold prices and safe-haven demand due to plenty of geopolitical and economic uncertainty.

The bank said this week it now sees silver prices averaging $35.14/oz in 2025, raised from its previous forecast for $30.28/oz; $33.96/oz in 2026, against an earlier forecast of $26.95/oz; and $31.79/oz in 2027, compared to its former outlook for $28.30/oz.

While silver prices have surged 31% YTD, HSBC cautioned the rally is due "more to silver's relationship with gold than underlying fundamentals," with record-high gold exerting a "strong gravitational pull" on silver.

On the supply side, HSBC sees silver mine output continuing to rise at a modest pace, as its supply-demand model forecasts a silver deficit of 206M oz in 2025 and 126M oz in 2026, compared to a 167M oz deficit in 2024.

HSBC also said a weaker dollar this year is a positive for silver, while ongoing debates over Federal Reserve rate cuts and central bank policies could impact prices going forward.

On Tuesday, gold futures drifted lower and silver futures gained modestly, as investors digested the latest U.S. economic data, which showed consumer prices rose 2.7% Y/Y in July, which market watchers said supported expectations for a September interest rate cut.

However, gains are seen being capped by increasing optimism for a resolution to the Russia-Ukraine war ahead of Friday's summit between Presidents Trump and Putin, as well as reduced tariff uncertainty.

Front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) for August delivery finished -0.1% to $3,348.90/oz, while front-month Comex August silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) closed +0.6% to $37.899/oz, its seventh gain in the past eight sessions.

ETFs: (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]), (NYSEARCA:GDX [https://seekingalpha.com/symbol/GDX]), (GDXJ [https://seekingalpha.com/symbol/GDXJ]), (IAU [https://seekingalpha.com/symbol/IAU]), (NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (NYSEARCA:SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (NYSEARCA:SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

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