Citi Reiterates Bullish Silver Forecast, Sees Price Hitting $90

Silver prices could surge to $90 per ounce within the next 6 to 12 months as a rebound in investment demand becomes the primary market driver, according to a research note from Citi analysts published Wednesday.

The Bullish Forecast

Citi maintained its price targets for the precious metal, forecasting a rise to $75 per ounce in the near term (0-3 months) and $90 per ounce over the 6 to 12-month horizon. The firm's analysts noted this outlook is set against a spot price of $65 per ounce.

The core of the bank's thesis is that investment flows will dominate price trends, overshadowing a near-term slowdown in industrial usage. According to the note, silver should "continue to track gold in direction with high beta," making it a leveraged play on improving macroeconomic conditions for precious metals.

Investment Demand Catalysts

Citi expects a "continued recovery in investment demand" to be fueled by several key factors:

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• A less hawkish Federal Reserve, which would likely ease macro headwinds such as higher real yields and a strong U.S. dollar.
• A potential de-escalation of geopolitical tensions, specifically referencing the Strait of Hormuz situation, which the firm's base case sees unwinding as soon as September-December.

Additional support for silver prices comes from strong physical demand in India, which is reflected in a domestic premium of roughly 7%. Citi anticipates this demand will strengthen further in the fourth quarter due to the country's festive and wedding season.

Industrial Outlook and Market Deficit

While investment demand is poised to take the lead, the industrial side presents a mixed picture. Citi noted that demand from the solar sector faces a "structural slowdown" due to thrifting—the practice of using less silver per panel—and the growing adoption of back-contact (BC) cell technology.

Despite this, Citi forecasts the global silver market will remain in a deficit through 2027. This is supported by resilient long-term demand from other high-tech sectors, including artificial intelligence (AI), 5G infrastructure, and electric vehicles.