HSBC says silver, which has fallen about 55% from its January record, is now close to a fair price and has limited room for a strong rally. The bank expects the global silver shortfall to shrink sharply this year as mine supply and recycling grow.
At a glance
- HSBC expects the silver market deficit to fall from 140 million ounces in 2025 to 5 million ounces in 2026.
- The bank does not expect silver to return to $100 an ounce any time soon.
- Buying of large bars by institutions in China and India should support demand.
Background
Silver hit a record of about $121 an ounce on January 29, 2026, after more than doubling between December and January. It has since fallen to around $54. A market deficit means the world uses more silver in a year than mines and recycling supply, so a smaller deficit leaves less pressure on prices.
What HSBC says
HSBC Global Investment Research said in a new report that silver prices are close to levels justified by supply and demand, the Economic Times and Fortune India reported on October 26. It remains mildly positive on silver but expects any gains to be limited.
The bank does not see silver challenging $100 an ounce in the foreseeable future unless tariff worries flare up again. Silver has fallen about 55% from its record of about $121 an ounce in January to around $54.
Why the outlook is cautious
HSBC expects the global silver deficit to shrink from 140 million ounces in 2025 to 5 million ounces in 2026, before widening slightly to 12 million ounces in 2027. Mine output is likely to rise sharply in 2027, and recycling is increasing as holders sell.
Industrial and jewellery demand is expected to weaken further. A firm US dollar and high bond yields could also cap gains, the bank said.
What could support prices
HSBC expects institutions in China and India to buy more large silver bars, and silver exchange-traded funds are rebuilding their holdings. A firmer gold price would also help silver. Prices could rise further if expected US interest rate rises do not happen.
Our read
Outlook: neutral. HSBC is mildly positive on silver but expects a shrinking deficit, rising supply and a firm dollar to limit any rally.
What to watch
- The US Federal Reserve's policy decision after its October 27-28 meeting.
- Silver ETF holdings, which HSBC says are being rebuilt.
- Mine output and recycling as 2027 supply grows.
For information only, not investment advice.
Silver price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-01-29: Silver hits a record of about $121 an ounce.
- 2026-10-26: HSBC's report says silver is near fair value with limited room for a strong rally.
Supply Drivers
HSBC expects mine output to rise sharply in 2027, while recycling grows as holders sell.
What could lift prices
- Silver ETFs are rebuilding their holdings after earlier outflows.
- Prices could rise if expected US rate rises do not happen.
What could weigh on prices
- The silver deficit is shrinking as mine output and recycling grow.
- A firm US dollar and high bond yields could cap gains.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | Medium | Institutional buying of large silver bars there should support demand. |
| India | Medium | Indian institutions are also expected to buy more large bars. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Silver Mining | Neutral | Prices are far below January's record, but HSBC sees them holding near fair value. |
Who gains, who loses
- Industrial silver users: Prices are about 55% below January's record and may not rise sharply.
- Investors who bought near the January record: HSBC does not expect a return to $100 an ounce any time soon.
Other ways this could play out
- If tariff worries flare up again, silver could rally more strongly than HSBC expects.
- If the dollar and bond yields keep rising, silver could fall further.
Price risks
- A US interest rate rise would weigh on precious metals.
- Silver has fallen more sharply than gold this year and could swing sharply again.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
China
India