Silver Prices and Market Trends
On February 5, 2026, silver bars were prominently displayed at the Perth Mint refinery in Australia. Recently, analysts have raised concerns about the significant rise in silver prices throughout 2025. This surge may lead to decreased demand from buyers, potentially pushing prices further away from last year’s peaks.
Silver’s diverse industrial applications make it more vulnerable to economic cycles compared to gold. It’s a crucial element in many products, including electronics, solar panels, and vehicles. A note by UBS dated May 22 indicated that the increasing cost of silver, which spiked about 140% last year, has begun to deter buyers across different sectors, negatively impacting demand.
As long as the prices remain high, UBS predicts a continued decline in demand. They noted that, unlike gold—which benefits from heavy purchasing by central banks—silver lacks that solid foundation of strategic demand and is not a component of government reserves. Consequently, it’s more sensitive to fluctuations in private investments and industrial requirements, which could hinder its performance compared to gold.
In an interesting turn, UBS expressed that current investment opportunities in silver might not compensate adequately for the volatility associated with it, labeling them as “unattractive.” Silver’s remarkable ascent peaked on January 28 when it reached $120 an ounce, only to plummet nearly 30% in a single day.
After hitting a low of $67.60 on March 20, prices have somewhat bounced back. However, they are still far below pre-Iran war levels. In mid-May, both spot silver and silver futures increased, trading around $87 an ounce, but they have fallen back recently, settling between $75 and $78.
As of Thursday, spot silver was trading about 3.7% lower at approximately $72.13, while silver futures also dropped 3.7% to $72.16. Conversely, HSBC analysts argue that silver is “fundamentally overvalued,” suggesting that its path may be different from gold’s trajectory. They believe there’s limited potential for further increases, even with gold’s influence. The gold-to-silver ratio is expected to widen, which could see silver prices declining despite gold’s rise.
Macquarie analysts hold a similar view, anticipating little chance for silver recovery. They expect the Federal Reserve might raise interest rates in the first half of 2027, which would likely exert additional downward pressure on precious metal prices. Macquarie indicated that they foresee average silver prices remaining at current levels for the rest of the year, while volatility persists until stability returns to the Middle East. They mentioned significant risks if broader economic conditions worsen.
