Silver could fall further after latest slump, analysts say as they warn of demand destruction Silver’s substantial price gains over the past year have led to demand destruction among industrial buyers, with analysts from UBS and HSBC indicating that prices could decline further. Unlike gold, silver lacks a strategic demand anchor from central banks and is more vulnerable to shifts in industrial and private investment demand. Analysts suggest the gold:silver ratio may widen, leading to a potential easing of silver prices even if gold rallies.

• Silver’s rally of approximately 140% last year has led to demand erosion among industrial buyers.
• Analysts from UBS and HSBC believe silver is fundamentally overvalued and could fall further.
• Silver’s industrial uses make it more sensitive to the economic cycle than gold.
• Unlike gold, silver does not benefit from robust central bank buying and lacks a strategic demand anchor.
• UBS considers silver an “unappealing” investment due to its volatility and insufficient reward.
• Silver prices experienced a significant drop from highs, recovering partially but remaining below pre-war levels.
• HSBC expects the gold:silver ratio to widen, suggesting silver could ease even if gold rises.
• Macquarie analysts anticipate the Federal Reserve hiking interest rates in early 2027, potentially pressuring precious metal prices.
• Volatility in silver prices is expected to persist until the Middle East situation is resolved, with downside risk if the macro situation deteriorates.