Silver prices are facing significant downward pressure following a remarkable 140% rally in 2025, raising concerns about demand destruction among industrial buyers. Analysts from UBS highlight that silver’s diverse industrial applications make it more sensitive to economic cycles compared to gold, leading to reduced demand as prices remain elevated. The absence of strategic demand from central banks further complicates silver’s market position, making it vulnerable to shifts in private investment and industrial usage.

Currently trading around $72 an ounce, silver has experienced notable volatility, with prices plummeting nearly 30% in January before recovering slightly. However, analysts at HSBC and Macquarie suggest that silver remains fundamentally overvalued, with limited upside potential. They anticipate that further interest rate hikes by the Federal Reserve could exert additional downward pressure on precious metal prices, particularly if macroeconomic conditions worsen.

Market professionals should be cautious, as the outlook for silver appears bleak, with analysts forecasting continued volatility and potential for further price declines in the near term.

Source: cnbc.com