Silver’s breakneck rally in 2025 reached its peak on January 28 of this year, punching through $120 an ounce before an almighty crash of almost 30% in a single day sent prices plummeting back down to earth. While the precious metal was particularly subdued during the early throes of the Iran war, prices have gradually recovered since then. Both spot silver and silver futures have climbed 10% over the last month to each trade at around $87 an ounce. But analysts at HSBC say the metal is “fundamentally overvalued” and could diverge from gold in its trajectory. “We believe further room to the upside is limited as silver remains overvalued, in our view,” they wrote in a note published on Thursday. “Gold prices will likely remain influential, but we believe the gold:silver ratio is likely to widen, allowing silver to ease even if gold rallies.” @GC.1 @SI.1 1Y line Gold and silver prices have been under pressure since the war broke out Silver is used for a wide range of industrial purposes. It is an essential component in a variety of goods, from computers and mobile phones to solar panels and cars. As such, it is more sensitive to the economic cycle than gold, and HSBC sees the fortunes of the two metals splitting as a result of silver’s more industrial properties. “Silver prices will be aided by still-high gold and a host of macroeconomic and geopolitical factors, but not necessarily driven higher by them,” the analysts added. “Reduced industrial demand and supply increases may begin to weigh on prices as the year progresses and the threat of tariffs to gradually recede further as 2026 unfolds.” But a lasting end to the U.S.-Israeli conflict with Iran would also boost both gold and silver prices , according to other market watchers. Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, told CNBC on May 7 that he saw the downturn in gold and silver prices as a “consolidation phase.” “We expect the secular bull market in gold and silver to resume and the metals to reach new all-time highs in the not too distant future, potentially this year,” he told CNBC. An end to hostilities would allow for the fundamentals behind gold’s rise to resume, according to Suki Cooper, global head of commodities research at Standard Chartered. “The structural drivers behind gold very much remain intact, whether it’s concerns about fiat currency debasement, concerns about Fed independence or trade uncertainty, or just the need to have a safe haven asset and diversify a portfolio,” she told CNBC’s Europe Early Edition on Thursday. “In the near term, though, that need for liquidity trumped the need for a safe haven asset.”
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