As silver prices surge over 200% year-on-year and the gold-silver ratio plummets to multi-year lows, HSBC Holdings PLC analysts issued a warning on Tuesday: the current silver rally is more likely driven by a combination of "chasing momentum, retail participation, and recovering industrial demand," rather than silver becoming a new safe-haven asset. In the bank's view, silver investors may need to start considering profit-taking. Regarding gold, HSBC maintains a medium-term bullish stance but emphasizes that the 2026 market could be highly volatile, with a risk of a pullback in the second half of the year.
In a report released on Tuesday, HSBC analysts stated that after silver prices skyrocketed more than 200% over the past year, the gold-silver ratio has fallen to multi-year lows, forcing the market to ponder whether it's time to "sell the family silver." The analysts wrote that the silver surge has flipped the gold-silver ratio from "exceptionally high" in April 2025 to "exceptionally low" currently, while gold prices have only risen by about one-third during the same period.
HSBC emphasized that it is unlikely silver has become a new safe-haven asset. A more plausible explanation is that, in its catch-up to gold, trend momentum has dominated, with retail funds flowing in accordingly; simultaneously, industrial demand is recovering, thereby strengthening the upward trend.
Since the beginning of the year, HSBC has maintained an overall stance of "cautious optimism but emphasizing downside risks" for precious metals. On January 8, HSBC analysts noted that rising geopolitical risks and debt pressures could push gold prices to $5,050 per ounce in the first half of 2026, but this also implies the potential for a more significant correction in the second half. HSBC forecasts a 2026 gold price range of $3,950 to $5,050, with a year-end target of approximately $4,450. Although the $5,050 forecast is higher than the previous $5,000 estimate, HSBC concurrently slightly lowered its 2026 average gold price forecast from $4,600 to $4,587, citing that rising prices may trigger technical and sentiment-driven corrections within the year.
HSBC further warned that if geopolitical risks ease or the Federal Reserve halts interest rate cuts, the correction in gold could be deeper, suggesting that the 2026 gold trading environment may be "highly volatile."
Regarding longer-term forecasts, HSBC raised its average gold price expectations for 2027-2029: it increased the 2027 average price forecast to $4,625 (from $3,950), raised the 2028 forecast to $4,700 (from $3,630), and provided a 2029 average price forecast of $4,775.
Despite near-term vigilance towards volatility and corrections, HSBC remains positive on gold's medium-term trend. In late November last year, HSBC FX and Commodities Strategist Rodolphe Bohn stated that, supported by robust demand from central banks and retail investors, gold is still expected to maintain an upward trajectory. In HSBC's "Think Future 2026" outlook report, Bohn noted that despite strong performance this year and recent increased volatility, HSBC maintains a positive view on gold for the coming months, believing investors can use gold to diversify risks in global assets, especially foreign exchange: during periods of severe market turbulence, gold exhibits resilience and still holds further appreciation potential.
Bohn pointed out that gold experienced "one of its most successful years" in 2025, primarily driven by rising global uncertainty and concerns over US dollar depreciation. Even with improving global sentiment and rising global equity markets, the current market environment continues to support gold prices. He believes that continued central bank buying, concerns over a weaker US dollar, and sustained demand for gold ETFs will keep gold a key diversification tool in portfolios, helping investors navigate persistent global uncertainty.
However, Bohn also highlighted downside risks: if the Federal Reserve unexpectedly adopts a more hawkish stance or the global economic environment improves significantly, it could challenge HSBC's positive outlook. Overall, HSBC believes that against a backdrop of a weakening US dollar and further global monetary easing, particularly from the Fed, gold prices still have a foundation for further gains, but the pace of appreciation may slow compared to previous phases.
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