Citi made a bet on silver above $40. Why did the bank improve its forecast?

Silver will continue to grow in price and may rise above $40 per troy ounce in the coming months, predicts Citigroup. The bank from Wall Street explains it by the reduction of metal supplies to the market with stable investment demand. At the same time, the attitude to gold remained restrained: Citi analysts believe that its peak has already been passed.

Citi raised its three-month forecast for silver to $40 from $38 an ounce, and expects it to rise to $43 over a six- to twelve-month horizon. This forecast implies price increases from current levels of 5% and 13%, respectively. 

The outlook for gold remained unchanged: the bank believes the high has already been reached and is still betting on prices falling below $3,000 next year, reports Bloomberg.

"We expect silver's affordability to decline on the back of multi-year shortages, reluctance of stockpile holders to sell at current prices and sustained investment demand," Citi analyst Max Leighton said. - The recent rise in silver prices reflects not only a desire to catch up with gold, but also strong fundamentals."

Precious metals have been among the most lucrative assets in the exchange-traded commodities market in 2025. Since January, gold has risen 27% thanks to demand from central banks, inflows into exchange-traded investment funds and uncertainty triggered by U.S. trade policy;

However, since the beginning of the year silver prices have risen even more strongly - by 31%. In July, silver prices hit their highest level since 2011. Silver is not only a safe haven asset, but also an important industrial metal for solar panels and other green energy projects, Bloomberg noted at the time. According to data from the Silver Institute, an industry organization, the market shortage of silver has persisted for the fifth consecutive year.

On July 16, the price of silver rose to $38 per ounce, having recovered after a two-day correction. A day earlier, the market was pressured by fresh data on inflation in the U.S. - they weakened traders' hopes for a rapid reduction in interest rates, reports Trading Economics. The expectations were also cooled by rhetoric of the head of the FRB Dallas Laurie Logan: according to her, the Fed will have to keep rates high longer to keep inflation under control against the background of the approaching increase in import duties;

This article was AI-translated and verified by a human editor