$300 Silver? Bank of America says maybe

Bank of America recently released an eye-popping silver forecast, saying the price could land anywhere between $135 to $309 by the end of the year.

You’ll note that even the low end of that forecast would represent a 75 percent gain from the current level.

You’ll also note the extremely wide range for that forecast. This underscores the difficulty of reading the markets in such a volatile geopolitical period.

Bank of America head of metals research Michael Widmer bases his forecast on the gold-silver ratio. This ratio reflects the number of ounces of silver it takes to buy one ounce of gold, given the current spot price of both metals.

In the modern era, the gold-silver ratio has averaged between 40:1 and 60:1. Through the first 10 months of 2025, the gold-silver ratio was historically high, averaging 91:1. The ratio peaked in April at 107:1. By the end of the year, the ratio had plunged to 61:1 before falling into the sub-50s early this year. This indicates a significant correction in the silver price.

The ratio has crept back up in recent weeks and currently sits around 60:1, the high end of the historical norm. However, Widmer pointed out that during significant silver bull markets, that ratio has dropped far below the average. That’s the nature of averages. Sometimes things run far below the norm, and sometimes far above. Over the last several years, the gold-silver ratio has tended to run above the historic average. It wouldn’t be shocking for it to drop significantly below that level.

Widmer points out that in 2011, at the peak of the Great Recession precious metals bull market, the gold-silver ratio dropped to 32:1. Assuming $5,000 gold, that would push the silver price to $135.

However, we’ve seen gold-silver ratios even lower. During the Hunt Brothers silver squeeze in 1980, the ratio fell to 14:1. That would yield a silver price of $309.

Silver's link to Gold

There is even more upside if you believe the gold bull market still has legs. Many mainstream banks forecast $6,000 gold this year.

“I’ve highlighted before that the gold market has been very overbought. But it's actually still underinvested,” Widner said earlier this year. “There is still a lot of room for gold as a diversification tool in portfolios.”

Precious metals make up about 4 percent of the total financial market. However, within the professional investment sector, high-net-worth investors hold only 0.5 percent of their assets in gold. Last year, Morgan Stanley CIO Michael Wilson came out with an investment strategy that includes a 20 percent allocation to gold.

Even a small uptick in investment demand could drive the gold price higher. Widner said a 55 percent increase in gold investment would drive the metal to $8,000 an ounce. Notably, this is a best-case scenario in Wells Fargo’s analysis.

If gold continues to move higher, it will almost certainly take silver with it. While a large percentage of silver demand comes from industrial offtake, it is still fundamentally viewed as a monetary metal, and it tends to track with gold over time.

Not enough Silver

A move to over $300 per ounce of silver may sound extreme, but these wild price moves aren’t unprecedented. Keep in mind that a squeeze pushed the metal to $121 on January 29. Widner pointed out that silver more than tripled in 2011 while gold gained roughly 80 percent over the same 18-month stretch. He said he thinks 2026 sets up similarly, with gold’s momentum already well established.

More fundamentally, there is an ongoing shortage of silver. That precipitated two silver squeezes that first drove prices above $50 and then took them to that January high.

A convergence of factors from market dynamics to logistical problems led to an unprecedented silver shortage. While the market dynamics that got us here might be difficult to untangle, the situation is about as basic as it gets.

There’s not enough silver.

The silver market recorded a supply deficit for the fifth consecutive year in 2026.

Last year, demand outstripped supply by 40.2 million ounces (1,252 tonnes). That drove the 5-year market deficit to 716 million ounces. To put that into perspective, total silver mining output last year was 846 million ounces.

Metals Focus forecasts a 46.3-million-ounce supply deficit this year.

Before this string of successive market deficits, there was a cumulative above-ground stock rise of 243 million ounces between 2010 and 2020. Taken together, there has been a stock rundown of around 473 million ounces in the last 15 years.

When silver demand outstrips mining and recycling output, silver users must tap into aboveground stocks. That generally means rising prices to incentivize those holding silver to give it up.

That means the environment is right for additional silver squeezes.

Silver over $300 is certainly a best-case scenario, but it is clearly not out of the question. And even if the metal doesn’t reach those lofty heights this year, there is plenty of reason to remain bullish.