In a client note released Wednesday, Citi analysts reiterated a bullish outlook for silver, leaving their point-price forecasts unchanged at $75 per ounce for the 0-3 month horizon and $90 per ounce for the 6-12 month horizon. Those targets were set against a then-spot silver price of $65 per ounce.
The bank said it anticipates a renewed recovery in investment demand as the principal driver of silver prices, prompted in part by an eventual de-escalation in the Strait of Hormuz situation and by expectations for a less hawkish stance from the Federal Reserve. Citi framed silver as likely to move in the same direction as gold but with higher beta, describing it as an "ideal upside play" if tensions in the Strait are resolved quickly.
Citi expects that investment flows will come to dominate price action even as industrial consumption shows signs of weakening. On the industrial side, the firm pointed to a structural slowdown in solar demand driven by two factors it identified: thrifting and the increasing adoption of back-contact, or BC, cell technology. The bank suggested those developments will reduce silver intensity in solar installations.
Despite those industrial headwinds, Citi noted that silver has been weighed down by broader macro forces, specifically higher real yields and a strong U.S. dollar. The bank's base case, however, is for those pressures to ease, potentially "as soon as September-December," which could unwind some of the macro headwinds facing precious metals.
Physical demand dynamics in India were also highlighted as a price-supporting factor. Citi pointed to a roughly 7% domestic premium in India as evidence of strong local demand, and it expects that demand will strengthen in the fourth quarter because of the country’s festive and wedding season.
On the supply-demand outlook, Citi projects the global silver market will remain in deficit through 2027. The bank cited resilient demand from technology sectors including artificial intelligence, 5G and electric vehicles as ongoing supports for the market, even as BC adoption accelerates and potentially becomes a leading solar technology by 2028.
The bank maintained its unchanged point targets and laid out the specific market and macro factors it believes will determine whether investment flows reassert dominance over industrial trends in the months ahead.