Deutsche Bank's $70 Silver Call Meets a Market Still Hunting for Direction

Deutsche Bank forecasts silver averaging $70/oz in Q2 2027, as solar demand drops and inventories rise, even as silver gains 1.1% to $61.40.

Silver traders began the week with a modest reprieve, but the metal's longer-term story is being rewritten by forces far removed from the daily noise of the futures pit. Deutsche Bank analyst Daniel Ghali expects the average silver price to reach $70 per troy ounce in the second quarter of 2027, according to a study published Monday — a forecast that rests less on monetary policy than on a shifting balance between industrial consumption and available supply.

Solar Demand Loses Its Footing

The clearest headwind comes from the technology sector. Deutsche Bank estimates that global silver demand from solar applications will fall by more than 20 percent in 2026. The contraction is sharpest in Asia, where the bank projects a 33 percent decline for Chinese industry in that segment. Solar has been a central pillar of industrial silver consumption in recent years, and its retreat removes a key source of support.

That demand-side softening is colliding with a build-up in inventories at the world's major trading hubs. As Ghali outlined Friday, freely available stocks in London's commercial vaults have climbed to their highest level since November 2024. Inventories also rose on the COMEX futures exchange and in Shanghai. Should that trend persist, the analyst sees the market tipping into a physical surplus in 2027 — a backdrop that would likely mean more subdued volatility and weaker performance relative to gold.

Payroll Miss Reshapes the Rate Calculus

Near-term, silver found its footing in an unexpected place: the U.S. labor market. The American economy added just 29,000 nonfarm jobs in September, according to media reports, well short of the roughly 90,000 economists had penciled in. The soft print cooled expectations for further rate increases on the futures markets, and with the odds of an October hike falling to around 20 percent, the prospect of a pause in the tightening cycle lent support to non-yielding assets.

Higher Treasury yields and a firm dollar had been weighing heavily on the commodity in prior weeks. With the next rate decision effectively deferred to December, market participants used the improved backdrop to make early purchases.

Silver finished Monday's COMEX session at $61.40 per troy ounce, a gain of 1.1 percent from the prior close, steadying after weeks of losses. The quote sits roughly 50 percent below its 52-week high of $121.78.

Tariff Relief and a Fed Waiting Game

Sentiment also drew comfort from the banking sector. JPMorgan's head of precious metals trading assessed U.S. tariffs on silver and platinum group metals as unlikely, easing concerns about near-term trade barriers. Attention now turns to the Federal Reserve's meeting minutes, due Wednesday, which should shed light on how policymakers weigh a cooling labor market against inflation risks.

Across the banking industry, 2027 projections remain wide-ranging: several institutions expect a longer consolidation phase, with estimates spanning $65 to $95 per troy ounce. Whether Deutsche Bank's $70 target comes into view depends largely on how deeply the solar pullback reshapes the supply-demand equation — and, in the coming days, on the signals emanating from the Fed.