Silver has exceeded the USD 42/oz level, reaching a 14-year peak, bolstered by record gold prices and significant investment inflows, even amid a dip in global industrial activity. 

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We have updated our silver projections to align with our revised gold forecast (released on 11 September), now aiming for USD 44–47/oz by mid-2026. Furthermore, as interest rate cuts begin and the industrial cycle improves, we anticipate that silver will outperform gold, with the ratio between the two decreasing towards 80.

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In conjunction with this upgrade, we remind investors that historically, silver has exhibited double the volatility of gold, and higher prices usually correlate with an increase in gold prices. Therefore, investing in silver demands a considerably higher risk tolerance. With the price pullbacks in silver during late 2024 to early 2025 almost forgotten, the metal has shown a strong rally in recent months. We agree with the market consensus that silver should remain in high demand and continue to rise in value.

Key factors—including geopolitical tensions, high US fiscal deficits, sluggish US growth, and the likelihood of Federal Reserve rate cuts—create a favorable macroeconomic environment for gold, which in turn benefits silver due to its correlation with gold, typically around 0.5-1.0. This relationship is reflected in the consistent inflows into both precious metals' ETFs. Silver ETF inflows have surpassed 20 million ounces this quarter, with annual totals nearing 80 million ounces. Despite this surge being notable, total ETF holdings still fall over 200 million ounces short of the COVID-era 2021 peak of just above 1 billion ounces.

The expectation of declining interest rates, a weakening global economy, and unsustainable fiscal deficits in major economies like the US continue to attract investor interest in precious metals, promoting risk sentiment, diversification from the US dollar, and the pursuit of tangible assets. Given that these conditions are unlikely to change in the near future, we do not foresee a sudden drop in investor interest in silver.

This scenario, combined with our upward revision of the gold price forecast to USD 3,900/oz (up from USD 3,700/oz previously) for the upcoming quarters, has led us to modify our silver target to preserve essential ratios. Specifically, we expect the gold-silver ratio to hover around 85x, with the possibility of it decreasing towards 80x as monetary conditions relax and investors look ahead to an economic rebound in 2026. Consequently, we have adjusted our silver price forecasts for quarter-ends through 3Q26 from USD 42, 42, 44, and 44/oz to USD 44, 44, 47, and 47/oz, respectively. With this adjustment, we highlight that silver prices may reach an all-time high—a perspective that supports a long-term bullish view.