- Silver expected to stay in mid-$60s
- May hit $80 if gold reaches $5,000
- Fed and industrial demand spur dip
In market terms, silver is closely related to gold. Prices for the latter have fallen recently, but experts foresee it rising to $5,000 by year-end, so what does that mean for silver and how much does real-world demand for the precious metal affect prices?
Physical silver investment in the Middle East more than tripled to a record 353 tonnes in 2025, according to the Silver Institute. The metal will probably stay in the mid-$60s into next year, analysts say, as ebbing industrial demand and the prospect of higher US interest rates offset persistent supply deficits and support from robust gold prices.
Yet analysts’ relatively restrained forecasts belie extraordinary volatility in silver’s price over the past two years. It hit a record high of about $117 per ounce in January, having quadrupled over the prior 12 months, before sinking to a 2026 low of $56 in mid-July.
Silver is correlated with gold, although the strength of that link fluctuates. Silver rallied again to $71 in August but has since retreated to trade at $64 on Friday.
“A silver price in the mid-$60s is exceptionally robust,” said Philip Newman, managing director of Metals Focus, a London-based precious metals consultancy.
Gold also peaked in January – at roughly $5,600 an ounce – although its subsequent decline has been less pronounced. This month’s renewed precious metals downturn – silver fell nearly 3 percent on Thursday – partly reflects increasing market confidence the US Federal Reserve will raise interest rates in mid-September.
India is the world’s fourth-largest silver importer, bringing in 2.6 million kilograms of the precious metal in 2024, World Bank data shows. The UAE provided 92 percent, or 2.4 million kilograms, of India’s silver imports that year.
Unlike bonds and bank deposits, silver and gold pay no income, so higher interest rates generally make them less attractive.
Investors closing long positions, rather than opening new short selling positions, are causing the current price weakness, according to Ole Hansen, head of commodity strategy at Saxo Bank.
That indicates investors regard this as a correction “within an established trend rather than the beginning of a more fundamental bearish shift”, Hansen wrote in a September 7 note.
Swiss investment bank Julius Baer has a neutral rating on silver and three- and 12-month price targets of $65 and $67.50 respectively.
JPMorgan gives similar forecasts, predicting silver will average $63 in the fourth quarter of this year and $64 in 2027.
Metals Focus director Newman is more bullish.
“Silver remains strongly correlated to gold,” he said. “If gold reaches $5,000 by year-end, silver could top $80 over the same timeframe and then rally further next year. It’s unlikely to set new highs, but not impossible.”
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Supply-demand dynamics may suggest otherwise. The vast buildout of photovoltaic solar panels has been a major driver of silver consumption. In PV panels, a silver paste captures and carries electrical currents from the sun’s rays.
China, the world’s top PV manufacturer, imported huge amounts of silver in March to beat a tax deadline, since when Chinese manufacturers have steadily destocked their silver inventory, JPMorgan wrote in an August report. Also, technological innovations mean less silver is needed in each panel.
JPMorgan forecasts solar demand for silver will fall 30 percent in 2026 versus 2025, or by about 60 million ounces.
Overall demand last year was 1.1 billion ounces, the lowest since 2021, according to the Silver Institute. The most recent year in which supply exceeded demand was 2020, the organisation estimates. It forecasts annual demand will slip 2 percent this year.
Newman, however, said that from a single-year perspective there is little correlation between the silver price and whether there is a supply deficit or surplus.
“The industry had several years of demand exceeding supply, yet the price remained relatively low,” he added. “But over a longer period, it starts to matter – after five years of deficits, there was sudden upward pressure in prices, as witnessed in late 2025.
“Even though the market could be more balanced this year in terms of supply and demand, there are still those preceding, cumulative annual deficits so there may be the conditions for a fresh price spike.”