Citigroup Research believes the upward trend in precious metals is not yet over, with silver continuing to follow gold's direction and exhibiting a more aggressive upward movement due to its higher volatility. If the situation in the Strait of Hormuz eventually de-escalates, coupled with a less hawkish stance from the Federal Reserve, investment demand for precious metals will continue to recover.
Citigroup believes that short-term pullbacks do not change silver's position as a high-beta asset compared to gold. If easing geopolitical risks drive funds back into precious metals, silver could potentially rise to $95/oz by 2027.
However, Citigroup also maintains a risk scenario. The bank believes there is still approximately a 20% probability that silver will fall to $50/oz, indicating that current precious metals trading remains highly dependent on interest rate expectations, the dollar's performance, and geopolitical risks.
For the market, gold remains a core asset for defense and anticipation of interest rate cuts, while silver is better suited to expressing a more volatile market following a recovery in risk appetite.