Citi Projects Silver Could Surge to $90 as Investment Demand Takes Center Stage

Citi analysts are standing by a bullish forecast for silver, projecting the precious metal could climb to $90 per ounce within the next 6 to 12 months as investment demand recovers and supplants softening industrial consumption. The bank reiterated its price targets in a note to clients on Wednesday.

The Bullish Forecast

Citi's outlook anticipates a significant rally from silver's current spot price of approximately $65 per ounce. The bank's price targets are set at:

• $75 per ounce in the next 0 to 3 months
• $90 per ounce over the next 6 to 12 months

The primary driver for this forecast is an expected resurgence in investment flows. Analysts believe this will be catalyzed by a de-escalation of geopolitical tensions in the Strait of Hormuz and a dovish policy pivot from the U.S. Federal Reserve. According to the note, silver should "continue to follow gold with a high beta," making it an "ideal upside tool" for investors betting on a swift resolution to geopolitical risks.

Shifting Demand Dynamics

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While investment demand is poised to rise, Citi noted that industrial demand, particularly from the solar sector, faces a structural slowdown. This is attributed to manufacturers using less silver per panel—a process known as thrifting—and the increasing adoption of back-contact (BC) cell technology. The bank projects BC technology could become the mainstream solar standard around 2028.

However, weakness in solar is being offset by robust physical demand elsewhere. Citi highlighted strong consumption in India, where local premiums for silver are holding at around 7%. The bank anticipates demand in the region will strengthen further in the fourth quarter, driven by the country's festival and wedding season.

Macro Context and Supply

Silver prices have recently been constrained by macroeconomic headwinds, including rising real interest rates and a strong U.S. dollar. Citi's base case scenario involves an easing of these pressures, potentially beginning between September and December, which would provide a tailwind for the metal.

Fundamentally, the global silver market is expected to remain in a supply deficit until 2027, according to the bank. This structural shortage is supported by sustained demand from high-growth sectors such as artificial intelligence, 5G infrastructure, and electric vehicles.