Citigroup's latest research report indicates silver prices will breach the $40 per ounce threshold in coming months amid tightening spot supply and surging investment demand. The bank simultaneously maintains a cautious stance on gold's trajectory.

Analysts led by Max Layton upgraded silver's three-month target from $38 to $40 per ounce while lifting the 6-12 month projection to $43. Gold forecasts remain unchanged, with Citigroup suggesting bullion may have peaked and reiterating its prediction of prices dipping below $3,000 next year.

"Persistent market deficits, producers holding back sales for higher prices, and robust investment inflows should sustain tight silver supply," analysts emphasized. "The recent price surge reflects not merely a catch-up rally with gold, but fundamentally strong underlying conditions."

Precious metals have dominated commodity market gains this year. Gold soared over 25% to record highs, fueled by central bank purchases and ETF inflows, while trade tensions amplified safe-haven appeal. Silver, displaying dual industrial and financial characteristics, has outperformed with year-to-date gains exceeding gold's.

"Anticipated Federal Reserve rate cuts will provide fresh momentum for silver," Citigroup analysts noted, while reaffirming their view that "gold prices have likely reached a cyclical peak."

Spot silver currently trades below $38/oz, boasting 31% year-to-date gains; gold hovers near $3,338/oz with a 27% advance.