Citigroup turns bullish over silver and raises its bar of three-month price forecast to $150 per ounce from $100. Spot silver has been on a historical run in 2026, gaining 50%, thereby beating gold’s 17-20% gain. Today, silver is trading around $113.63 – $115.00 per ounce, an all-time high of $117.69 earlier this week. Max Layton, Citi analyst, stated that the silver rally would drive strong physical and speculative demand from China. He also referred to silver as ‘gold on steroids’ and ‘gold squared’ because of its growth patterns, which are driven by investor capital rotating away from gold that was catalyzed by silver’s relatively cheaper industrial metrics.
What Triggered the Upgrade
Citigroup has cited strong momentum and capital reallocation to precious metals, tightening the physical supply conditions. Citi opined that silver’s valuation discount to gold leaves more room for further catch-up. The brokerage is expecting another 30-40% upside in silver prices in the coming weeks. While historically retracing prior peaks relative to gold, this trend is observed to place silver in the $160-170 range, and in extreme scenarios, maybe higher, which is less likely to occur now. The surge is centered on China, along with India’s rising premiums and a broader global demand. However, Citi pointed out that the emerging market investors in Shanghai are contributing immensely to the run-up compared to those in London.
Citi’s bullish stance is underpinned by the continued tightness in the silver market, specifically from the major trading hubs in the US. Citi has acknowledged many traditionally bearish indicators, including the outflow from the silver-backed exchange-traded funds (ETFs), speculative selling in the futures markets, and declining inventories from the US warehouses, thereby bolstering availability elsewhere. However, the brokerage believes that these factors have been overwhelmed by the stronger short-term momentum and physical market tightness.
A Speculative Infused Hike
The gold-to-silver price ratio was highlighted by Citi, trending towards the sub-50x level, portraying evidence of how stretched the silver prices have become. The rally points out heightened geopolitical risks like the Greenland dispute and renewed concerns regarding the Federal Reserve (the Fed) independence. While this underscores the speculative nature of the rally, the exceptional speed and volatility of silver’s rally since December are alarming many traders and investors. Citi also signaled to expect a short-term volatility increase after the sharp rally. The brokerage believes that the momentum could persist until silver becomes clearly expensive relative to gold. The key downside risk noted by Citi is profit-taking from the Chinese investors, particularly ahead of the Lunar New Year period. However, the brokerage points out that this risk is still a couple of weeks away.
Retail investors are more bullish on the sentiment for iShares Silver Trust (SLV) on Stocktwits, turning the ‘extremely bullish’ to ‘bullish’. However, not everyone is convinced and happy with the market data; economist Peter Schiff warned about an impending economic crisis after the gold surged above $5,000 an ounce on Monday. He posted on (X ) that most of the investors are clueless about the current market bull run.
