On Thursday, spot silver prices fell by 3.7% to $72.13 per ounce. This is much lower than the January peak, when on January 28 quotations for the first time exceeded the mark of $120 per ounce. However, the sharp growth was quickly replaced by panic: the next day the market experienced almost 30% collapse – one of the strongest one-day falls in recent years, CNBC writes.
After the March low at $67.60, silver tried to recover. In May, prices rose to $87 an ounce, but the momentum quickly faded and the market is stuck in the $75-78 range.
Analysts at HSBC believe the metal remains “fundamentally overvalued” and see no room for sustained growth.
“The upside potential is limited. The gold/silver ratio is likely to widen, allowing silver to decline even as gold rises,” the bank said in a review.
Analysts of Macquarie Bank have a similar position. According to their forecast, additional pressure on the market will have the policy of the U.S. Federal Reserve System. The bank expects a new increase in interest rates in the first half of 2027, which traditionally negatively affects demand for precious metals.
“Volatility will remain until the situation in the Middle East is resolved, with a significant downside risk if the macroeconomic environment deteriorates further,” Macquarie strategists warned.
Investors also fear a slowdown in the global economy and a stronger dollar, making silver a less attractive asset. Unlike gold, silver is highly dependent not only on investment demand, but also on industrial consumption, because of which its quotations usually react more sharply to economic risks.
