The price of silver, after its surge in 2025, is now facing bearish pressure from multiple fronts.

On Thursday, the spot price of silver fell to approximately $73.28 per ounce, marking a cumulative decline of nearly 40% from the historic high of $120 reached on January 28th this year.

Concurrently, HSBC, UBS, and Macquarie have each released research reports warning of further downside risks for silver prices. 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.

HSBC stated bluntly in its Thursday report that silver is "fundamentally overvalued" and anticipates a further widening of the gold-to-silver ratio. This suggests that even if gold rises, silver could remain under pressure. This judgment implies a potential significant divergence in the price trajectories of silver and gold, serving as a direct warning to investors holding long positions in silver.

Demand Erosion: High Prices Are Deterring Industrial Buyers A key characteristic that distinguishes silver from gold is its extensive industrial use—from computers and mobile phones to solar panels and automobiles, silver is a core raw material for numerous industrial products. This attribute makes it far more sensitive to economic cycles than gold and also leaves it more vulnerable to active demand contraction following significant price increases.

UBS noted in a report dated May 22nd that silver's roughly 140% gain in 2025 has begun to deter buyers across industries, with high prices suppressing physical demand. "As long as prices remain at current levels, demand erosion is likely to continue," wrote UBS analysts.

UBS further emphasized that, unlike gold, silver does not benefit from strategic purchases by central banks and is not part of official reserve assets. "Consequently, silver is more susceptible to fluctuations in private investment and industrial demand, and its performance may lag behind gold's." UBS believes the investment value of silver currently does not sufficiently compensate for its associated volatility risk, making it an "unattractive" allocation option for investors.

Three Major Institutions: Downside Risks Not Yet Cleared Silver's recent price action has been dramatic. It gained approximately 140% throughout 2025, breaking through the $120 per ounce level on January 28th this year, only to plummet nearly 30% in a single day, setting a rare record for daily decline.

Although prices have recovered somewhat since, they have failed to reclaim lost ground. 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 weakened again, trading within a range of $75 to $78 over the past two weeks.

The latest reports from HSBC, UBS, and Macquarie collectively point to silver's downside risks from different angles.

HSBC views silver as "fundamentally overvalued" with limited upside and expects the gold-to-silver ratio to widen—meaning silver could depreciate further relative to gold. "Gold price movements will still influence silver, but we believe the gold-to-silver ratio could expand; even if gold rises, silver may follow with a decline," wrote HSBC analysts in Thursday's report.

Macquarie highlighted risks from a macro-policy perspective. The firm's strategists anticipate the Federal Reserve will raise interest rates in the first half of 2027, which would exert additional downward pressure on precious metal prices.

Macquarie wrote in its May 21st report: "While we expect the average silver price to remain near current levels for the remainder of the year, volatility will persist until the Middle East situation is resolved, and there is significant downside risk should the macro environment deteriorate further."