Silver Bull Market to Accelerate! Citi Expects $90 with Potential 40% Surge

Citi Bank, in its latest analysis, predicts that silver prices could rise to $75 in the next 3 months and potentially challenge $90 in 6-12 months, representing a roughly 38% increase from the current spot price of around $65. Citi Bank believes that the upcoming rally in silver will no longer be primarily reliant on industrial use but will be driven by capital flows. As the tensions in the Hormuz Strait are expected to ease, coupled with the potential for the Federal Reserve's policy stance to become more accommodative, factors that have previously suppressed precious metals, such as a strong dollar and rising real interest rates, are expected to gradually dissipate, driving a sustained recovery in silver investment demand. Silver typically moves in the same direction as gold but has higher price elasticity. Citi Bank describes that if the Hormuz Strait standoff is quickly resolved, silver will become an ideal target for betting on a rise in precious metals. The bank's base case scenario estimates that Middle East tensions could ease as early as September to December this year, at which time silver is expected to follow gold's price increase with a larger magnitude. On the other hand, the industrial demand outlook for silver is beginning to undergo structural changes. Solar energy companies are continuously reducing the amount of silver used per unit cell and accelerating the adoption of back-contact (BC) cell technology, which could slow the growth in silver demand from the solar industry. Citi Bank estimates that BC technology could become one of the mainstream technologies in the solar market as early as 2028. However, the demand for silver from the AI, 5G, and electric vehicle industries remains resilient. Citi Bank expects that the global silver market will remain in a state of supply shortage at least until 2027, providing medium- to long-term support for silver prices. The Indian market is another bullish factor. Currently, domestic silver prices in India are about 7% higher than international prices, reflecting strong local buying. As the fourth-quarter festival and wedding season approaches, silver demand in India is expected to further heat up.