HSBC just raised its silver price forecasts. It also warned that the upside may already be limited. Both of those things are true at the same time, and understanding why is the most important thing investors need to take from this note.
James Steel, HSBC’s chief precious metals analyst, published a revised outlook that lifts the bank’s average price forecast for 2026 and 2027 while simultaneously setting year-end targets below where silver currently trades.
That is not a contradiction. It’s a very specific read on what has driven silver’s strength so far and why that driver may fade in the second half of the year.
HSBC raises silver price forecast: what James Steel said
HSBC raised its average silver price forecast for 2026 to $75 per troy ounce from a prior estimate of $68.25, and lifted its 2027 average to $68 from $57, according to Investing.com.
The bank also set year-end targets of $70 for 2026 and $65 for 2027, which sit below the current spot price, signaling that HSBC expects prices to weaken during the second half of both years, InvestorsHub confirmed.
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James Steel, chief precious metals analyst at HSBC, was direct about the ceiling. “Moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” he said, according to Investing.com.
Steel also cautioned that “the gold: silver ratio is likely to widen, allowing silver to ease even if gold rallies,” a notable warning for investors who assume silver automatically tracks gold higher.
Why the deficit is shrinking and what that means for silver prices
The supply deficit is the core reason silver bulls have been optimistic, and HSBC is now projecting it will narrow significantly. The bank estimates the global silver market deficit will shrink to 73 million ounces in 2026 from 143 million ounces in 2025, before narrowing further to just 25 million ounces in 2027 as mine production and recycling supply increase, Investorshub confirmed.
Mine production is expected to hold broadly steady at 848 million ounces in 2026 before rising to 868 million ounces in 2027. Recycling supply is forecast to grow to 216 million ounces this year from 197 million in 2025. Together, those supply increases are not dramatic, but they arrive against a backdrop of softening demand that makes the deficit math change meaningfully.
Industrial demand, which accounts for more than half of total global silver consumption, declined to 657 million ounces in 2025 from a record 679 million ounces the year before.
HSBC expects it to fall further to 642 million ounces in 2026 and 618 million ounces in 2027, as manufacturers increasingly seek to reduce or substitute silver usage in response to elevated prices. Jewelry demand is projected to fall to 157 million ounces this year from 189 million ounces in 2025, according to Investorshub.
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Why HSBC raised silver forecasts despite its cautious tone
The reason HSBC raised its average silver price forecasts while simultaneously warning about limited upside is that the first half of the year has already been stronger than its prior models assumed. Silver’s January record high and subsequent recovery above $86 have pulled the full-year average materially above the bank’s previous $68.25 estimate.
A higher realized first-half price mechanically lifts the annual average, even if the second half is expected to be weaker.
The factors supporting silver in the near term — a weaker U.S. dollar, ongoing geopolitical uncertainty, and safe-haven demand linked to the Middle East conflict and trade policy tensions — are real.
But Steel’s framework treats them as cyclical rather than structural. When those tailwinds fade, and HSBC expects they will, the shrinking deficit means silver will have less fundamental support to fall back on.
That dynamic is what separates HSBC’s view from a straightforward bullish call. The bank is essentially saying that current prices are defensible given near-term macro conditions, but the structural case is weakening, and investors who extrapolate the January rally into the second half of 2026 are likely to be disappointed.
Key figures from HSBC’s May 17 silver outlook:
- 2026 average silver forecast: $75 per troy ounce, raised from $68.25; year-end 2026 target: $70
- 2027 average silver forecast: $68 per troy ounce, raised from $57; year-end 2027 target: $65
- Global silver deficit: 73 million ounces in 2026, down from 143 million in 2025; 25 million ounces in 2027
- Industrial demand: 657 million oz in 2025, declining to 642 million in 2026 and 618 million in 2027; jewelry demand falling to 157 million from 189 million in 2025
- Mine production: 848 million oz in 2026, rising to 868 million in 2027; recycling supply 216 million oz in 2026 from 197 million in 2025
- Steel’s key caution: “The gold: silver ratio is likely to widen, allowing silver to ease even if gold rallies.”
Source: Investorshub
What HSBC’s call means against UBS’s opposite move on silver
The silver analyst community is now split. Earlier this month, UBS cut its silver price targets sharply, reducing its deficit estimate by approximately 80% and lowering year-end forecasts across 2026 and 2027. HSBC has moved in the opposite direction, raising average forecasts while keeping year-end targets below the current spot price.
The divergence reflects genuine uncertainty about which factor will dominate silver’s price action in the second half of 2026: the macro support from a weaker dollar and safe-haven demand, or the structural headwinds from a shrinking supply deficit and weakening industrial consumption. HSBC and UBS are looking at the same data and reaching different conclusions about which of those forces matters more.
For investors, the key takeaway from HSBC’s note is not the higher averages but the year-end targets. At $70 for year-end 2026, HSBC is forecasting a price below where silver trades today. The bank is saying the first half was stronger than expected and the second half will be weaker.
That is a more measured and useful framework than either a straight bullish or bearish call, and it tells investors that the easy trade in silver for this year may already be behind them.
Related: UBS resets silver price target for rest of 2026
