Silver's Golden Wings — Rally To Hold Through H1 And Correct In H2, Predicts HSBC

Silver’s historic rally is going steady, calming down from the historic highs it hit in 2025 — but its next act may be far less linear. According to a fresh outlook from HSBC Global Research, the metal is likely to remain buoyant through the first half of 2026 before facing a meaningful correction in the latter part of the year as supply responses kick in and demand cools.

HSBC expects silver prices to stay elevated in the near term, supported by lingering tightness in physical markets, strong investment flows and gold’s continued strength.

The bank notes that silver surged to a record $83.60 per ounce in December 2025, driven by acute shortages of deliverable metal, sharp backwardation in futures markets and heavy ETF inflows. These conditions, it says, are unlikely to ease quickly, keeping volatility high and prices supported through H1.

However, HSBC is clear that current price levels are fundamentally stretched. "Silver is overvalued," the report says, flagging weakening industrial demand and a gradual rise in supply from mining, recycling and producer hedging as key headwinds that should begin to assert themselves in the second half of the year.

Industrial demand—traditionally more than half of total silver consumption — is already showing signs of fatigue as high prices encourage substitution and thrifting. Jewelry demand, especially in price-sensitive markets, is also expected to soften further, even as high gold prices continue to offer some crossover support.

On the supply side, HSBC expects global production-consumption deficits to narrow from 230 million ounces in 2025 to around 140 million ounces in 2026, with recycling flows picking up as prices remain attractive for scrap sellers. Over time, the bank expects physical tightness — particularly the London market squeeze that defined late 2025 — to unwind as stocks gradually migrate back and logistical distortions ease.

Reflecting this push and pull, HSBC has raised its average silver price forecast for 2026 to $68.25 per ounce, but warns this masks a wide expected trading range of $58 to $88, with downside risks skewing toward H2. Its end-2026 forecast for the white metal stands at $62 per ounce, falling further to $55 in 2027.