Citigroup analysts expect silver prices to rise beyond $40 per ounce in the coming months as physical supplies tighten and investment demand grows.

Analysts at Citigroup, led by Max Layton increased their three-month silver price forecast from $38 to $40 in a report released on Wednesday, reports Mining.com

Silver currently trades at $38, up over 3% in the last 1 month. With a 24% increase in the past year and a 30% year-to-date increase, silver prices have risen to their highest level in over 13 years.

With a price estimate of $43 for the upcoming six to twelve months, they also improved the longer-term view for silver.

Silver prices will rise by 5% to $40 over the short term, and by 13% to $43 over the next 6-12 months, according to Citi projections.

“We expect silver availability to tighten on consecutive years of deficit, sticky stockholders requiring higher prices to sell, and robust investment demand,” the Citi analysts wrote.

The $30 billion silver market, with a small annual turnover, can significantly affect prices even if there’s a slight change in demand. Silver’s demand is predicted to surpass supply for the fifth consecutive year in 2025, with a demand of 1.20 billion ounces compared to a global supply of 1.05 billion ounces.

The gold-silver ratio has been signalling a breakout in silver prices. From a high of nearly 100 in January, the gold : silver ratio has dropped to 85. The long-term average gold : silver ratio is 70, indicating that there is still an opportunity for silver to rise.

According to Citi analysts, it is ‘not just a catch-up trade to gold,’ but also reflects solid silver fundamentals. Silver, a crucial industrial commodity and monetary asset, is playing an increasingly significant role in solar power, electronics, and electrification, accounting for over half of global demand.

Citi is not as bullish on gold’s future, which has risen by more than 27% in 2025 due to robust central bank purchases and exchange-traded fund inflows.

Back in June, Citibank predicted that following a record-breaking gain, the price of gold is expected to reverse shortly and in the upcoming quarters, gold will drop below $3,000.

The bank is sticking to its prediction that gold will consolidate above $3,000 during the next quarter before falling below that mark the following year. Layton and other analysts expect that gold will continue to decline into the $2,500–$2,700 range in the second half of 2026.