After a dramatic surge in 2025, the price of silver is now facing significant bearish pressure from multiple fronts. On Thursday, the spot price of silver fell to approximately $72.96 per ounce, marking a cumulative decline of nearly 40% from the historical high of $120 reached on January 28th of this year.

Concurrently, three major financial institutions—HSBC, UBS, and Macquarie—have released research reports warning of further downside risks for silver. Their core logic points in the same direction: high prices are increasingly eroding demand, and silver lacks the strategic demand support from central bank purchases that gold possesses. In a report issued on Thursday, HSBC stated bluntly that silver is "fundamentally overvalued" and anticipates that the gold-to-silver ratio will widen further. This implies that even if gold prices rise, silver could remain under pressure. This assessment suggests a potential decoupling in the price trends of silver and gold, serving as a direct warning to investors holding long positions in silver. Demand Erosion: High Prices Deter Industrial Buyers A key characteristic that distinguishes silver from gold is its extensive industrial utility—it is a crucial raw material in a wide range of products, from computers and mobile phones to solar panels and automobiles. This attribute makes it far more sensitive to economic cycles than gold and also makes it more susceptible to active demand contraction following significant price increases. In a report dated May 22nd, UBS noted that silver's roughly 140% gain in 2025 has begun to deter buyers across various industries, with high prices suppressing physical demand. "As long as prices remain at current levels, demand erosion is likely to persist," UBS analysts wrote. UBS further emphasized that, unlike gold, silver does not benefit from strategic purchases by central banks and is not considered an official reserve asset. "Consequently, silver is more vulnerable to fluctuations in private investment and industrial demand and may underperform relative to gold." UBS believes that the current investment value of silver is insufficient to compensate for its accompanying volatility risk, making it an "unattractive" allocation option for investors. The Three Institutions: Downside Risks Not Yet Cleared Silver's recent price action has been exceptionally volatile. It gained approximately 140% over the course of 2025, breaking through the $120 per ounce level on January 28th of this year, only to plummet nearly 30% in a single day, setting a rare record for daily losses. Although prices have recovered somewhat since then, they have failed to reclaim their previous highs. Silver hit a 2026 low of $67.60 per ounce on March 20th, rebounded to around $87 per ounce in mid-May, and has since softened again, trading within a range of $75 to $78 over the past two weeks. The latest reports from HSBC, UBS, and Macquarie collectively highlight downside risks for silver from different perspectives. HSBC views silver as "fundamentally overvalued" with limited upside, and expects the gold-to-silver ratio to widen—indicating that silver could depreciate further relative to gold. "Gold price movements will still influence silver, but we believe the gold-to-silver ratio could expand, meaning silver may decline even if gold rises," HSBC analysts wrote in their Thursday report. Macquarie highlighted risks from a macro-policy angle. The firm's strategists anticipate that the U.S. Federal Reserve will raise interest rates in the first half of 2027, which would exert additional downward pressure on precious metal prices. In a report dated May 21st, Macquarie stated: "While we expect the average silver price to hover around current levels for the remainder of the year, volatility will persist until Middle East tensions are resolved, and there is significant downside risk if the macro environment deteriorates further."