HSBC Raises Silver Price Forecast: Analysis of Precious Metals Investment Strategies Amid Narrowing Supply Gap

On January 7, 2026, HSBC released a report raising its

[1], a sharp roughly 53% increase from its previous projection of $44.50. Meanwhile, the bank forecasts the 2027 silver price at $57.00 per ounce. The core logic behind HSBC’s upward revision lies in , and [2].

According to HSBC’s forecast,

: the 2026 gap will narrow from approximately 180 million ounces in 2024 to 140 million ounces, and further decline to 59 million ounces in 2027[1]. This means the market is gradually shifting from severe supply-demand imbalance to a relatively balanced state.

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Indicator	Value
Current Price (January 7, 2026)	$77.80/oz [0]
2026 HSBC Forecast	$68.25/oz[1]
2027 HSBC Forecast	$57.00/oz[1]
YTD 2025 Increase	168.50% [0]
Period High	$83.94/oz[0]
Period Low	$27.97/oz[0]

: The current silver price ($77.80) is than HSBC’s 2026 forecast of $68.25, implying a [0]. This indicates the market may have already priced in some optimistic expectations in advance.

Indicator	Value	Interpretation
20-Day Moving Average	$72.52	Short-term uptrend remains intact
50-Day Moving Average	$62.25	Mid-term uptrend is clear
200-Day Moving Average	$46.11	Long-term moving average provides strong support
Price Relative to 200-Day Moving Average	+68.75%	In historical high range[0]
20-Day Annualized Volatility	65.45%	Price fluctuations are extreme[0]

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According to World Silver Association data,

, marking the 5th consecutive year of silver shortage[3]. However, the supply gap is gradually narrowing:

Year	Supply Gap (100 Million Ounces)	Narrowing Rate
2024	1.80	-
2025E	0.95	47.2%
2026E	0.14	85.3%
2027E	0.059	57.9%

:

1. Recovering Mining Output
   : 2025 global mined silver production fell to 820 million ounces[3], but high prices have given miners stronger incentives to increase output
2. Inventory Replenishment
   : TD Securities notes that the London silver market is making up for inventory losses from the past year, with potentially over 212 million ounces of physical silver available for free access[3]
3. Increased Recycled Silver Supply
   : High prices stimulate scrap silver recycling

Despite the narrowing supply gap,

:

• Photovoltaic Industry
  : 2025 global photovoltaic silver usage reached 7,560 tons, doubling from 2022, and its share of total global silver demand surged from 20% to 55%[3]
• New Energy Vehicles
  : 2025 silver consumption reached 2,566 tons, an increase of over 520 tons[3]
• AI and Data Centers
  : Silver usage is 30% higher than that of traditional equipment[3]

: Heraeus forecasts that 2026 photovoltaic new installed capacity growth may drop to approximately 1% due to changes in China’s policies[3]; attention should be paid to the risk of slowing industrial demand.

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The current silver price

, as reflected in:

1. Price-Forecast Divergence
   : The current price of $77.80 is approximately 12% higher than HSBC’s 2026 forecast of $68.25
2. Technical Overbought
   : The price is 68.75% above the 200-day moving average, in a historical high range[0]
3. Surge in Volatility
   : Annualized volatility reaches 65.45%, indicating extreme market exuberance[0]

Well-known macro strategist Lyn Alden warned: “When I see people on Twitter saying ‘silver $60’, ‘silver $61’, ‘silver $62’, my contrarian senses start tingling… I wouldn’t be surprised by a silver correction”[4].

Despite short-term correction risks, mid-term fundamentals still support silver prices:

Support Factor	Impact Analysis
Geopolitical Risks	Situations in Venezuela, disputes over Greenland, etc., boost safe-haven demand[2]
Fed Rate Cut Expectations	Loosening monetary environment reduces holding costs for precious metals[5]
Weakening US Dollar	Enhances the attractiveness of US dollar-denominated precious metals[5]
Central Bank Gold Buying Spree	Global central banks continue to increase gold holdings, driving the overall valuation of precious metals[5]

The

lies in its dual attributes:

• Precious Metal Attribute
  : Safe-haven and capital preservation functions
• Industrial Attribute
  : Demand growth driven by the new energy revolution

Hou Yanjun, General Manager of Houshi Tiancheng Investment, stated: “At the start of 2026, the gold and silver markets continued their strong rally… Gold and silver may maintain a relatively strong trend in the short term”[5].

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Precious Metal	Allocation Ratio	Participation Method	Strategy Key Points
Gold	5%-10%	Gold ETFs, Physical Gold Bars	Long-term allocation to avoid systemic risks
Silver	2%-5%	Silver ETFs, Futures	Swing trading, strictly control position size

Sui Dong, Researcher at PaiPaiWang, advised: “Control the gold allocation ratio at 5% to 10% of total assets, and participate via gold ETFs, physical gold bars, etc. Silver is suitable for swing trading; position size must be strictly controlled, and chasing highs is not advisable. It is appropriate to build positions in batches during pullbacks”[5].

1. Technical Correction Risk
   : The price may retest the monthly-level support around $60 per ounce[2]
2. Industrial Demand Falls Short of Expectations
   : A slowdown in photovoltaic installed capacity growth may weaken silver price support[3]
3. US Dollar Rebound Risk
   : The Fed’s policy shift may be less than expected
4. Unexpected Inventory Release
   : Large-scale silver supply replenishment may disrupt the supply-demand balance[3]

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HSBC’s sharp upward revision of its silver price forecast reflects the market’s consensus on long-term optimism for precious metals. However,

means the silver market is gradually returning to balance from extreme supply-demand imbalance. Current silver prices have already priced in some optimistic expectations in advance, and investors need to be wary of short-term technical corrections.

:

• Short-Term
  : Avoid chasing highs; wait for layout opportunities after pullbacks
• Mid-Term
  : Buy on dips after pullbacks, with a mid-term target range of $60-$68 per ounce
• Long-Term
  : As an important component of portfolio allocation, benefit from industrial demand dividends brought by the new energy revolution

As

, precious metals still have prominent allocation value against the backdrop of long-term downward pressure on US dollar purchasing power[4].

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[1] Cailian Press - HSBC Forecasts 2026 Average Silver Price at $68.25 per Ounce (https://www.163.com/dy/article/KIMP681205198CJN.html)

[2] Sina Finance - HSBC Sharply Raises Silver Price Expectations Amid Supply-Demand Imbalance and Rising Safe-Haven Demand (https://finance.sina.com.cn/7x24/2026-01-07/doc-inhfnqzm6192802.shtml)

[3] TradingKey - Silver and Copper Surge, Gold Continues to Rally! Will Gold, Silver and Copper Prices Continue to Skyrocket in 2026? (https://www.tradingkey.com/zh-hans/analysis/commodities/metal/251382306-gold-silver-copper-xau-xag-prediction-2026-tradingkey)

[4] Wall Street CN - Silver Could Hit $100 in 2026, But It’s No Longer a “Low-Risk, High-Reward” Opportunity (https://wallstreetcn.com/articles/3762221)

[5] Securities Times - Gold and Silver Prices Soar! How Should Investors Operate? (https://stcn.com/article/detail/3574923.html)

[0] Jinling AI Financial Database - Silver (XAG) Price Data and Technical Analysis