Institutions say silver is at risk of being overvalued, and its fair value may be only $40.
2026-04-22 13:10:16
The global precious metals market has recently experienced increased volatility, and silver, as a precious metal with a strong correlation to gold, has seen its price trend attract significant market attention.
Silver prices have gradually found support in the $78-$80 per ounce range, showing a relatively stable trend. However, behind this seemingly stable situation lies the potential risk of a significant correction. A recent precious metals research report released by Commerzbank has explicitly questioned the current valuation of silver prices, while also providing predictions for future price movements, attracting widespread market attention.
As of now, international silver prices have generally stabilized, remaining within the range of $78 to $80 per ounce. Market trading has been relatively stable, with bulls and bears currently in a state of equilibrium. However, this stability has not dispelled institutional concerns about silver prices. Commerzbank explicitly stated that current silver prices face significant overvaluation risks and may face substantial downward pressure in the future.
In her latest precious metals research report, Thu Lan Nguyen, Head of FX and Commodities Research at Commerzbank, explicitly points out that from a fundamental perspective, there is a significant gap between the fair value of silver and its current market price. Her fair value is closer to $40 per ounce, rather than the current level of $78 to $80 per ounce. This view implies that the current silver price has deviated from fundamental support, is clearly overvalued, and the pressure for a subsequent correction should not be ignored.
In her report, Ruan Qiulan further explained the core reasons for the current overvaluation of silver prices. She stated that the current rise in silver prices is not driven by economic fundamentals, but rather relies more on the upward momentum of gold prices, and has a low correlation with core economic fundamentals such as bond yields and the US dollar exchange rate.
She further added, "Silver prices are largely driven by gold prices. This round of increases is mainly because silver was previously undervalued relative to gold. In fact, the fair value of silver calculated after incorporating gold price factors is more consistent with the actual price trend." This statement clearly indicates that the current price trend of silver lacks its own fundamental support and is more of a passive rise following the upward trend of gold. The sustainability of this upward trend is questionable.
Although Commerzbank clearly believes that silver is already overvalued, Ruan Qiulan also stated that the current upward trend in silver prices is unlikely to end in the short term, as its core supporting factor is the continued strength of gold prices and gold's safe-haven properties.
She pointed out that gold, as a globally recognized safe-haven asset and an important tool for hedging against high geopolitical uncertainty, remains strongly supported. Research by Commerzbank also shows that gold's safe-haven appeal stems primarily from strong demand from central banks. In the current complex geopolitical environment, gold is seen as a neutral, non-politicized monetary asset, becoming an important choice for central banks' reserve asset allocation, which provides solid support for gold prices.
Meanwhile, although gold prices have fluctuated somewhat in recent weeks and faced some downward pressure, this is not because gold has lost its safe-haven properties. Rather, it's due to central banks and investors using gold as a source of liquidity, leading to a temporary sell-off. Ruan Qiulan emphasized that this liquidity sell-off has not weakened gold's safe-haven value, and gold's continued strength will continue to support silver prices.
It is worth noting that since the outbreak of the conflict in Iran, the silver market has undergone some adjustments, and the overvaluation situation has been alleviated to some extent. Ruan Qiulan stated in the report: "It is worth noting that since the outbreak of the conflict in Iran, the valuation of silver calculated by our model excluding gold price factors has remained relatively stable, and the pullback it predicted has been far less than the actual decline."
She further explained that after the outbreak of the conflict in Iran, some of the "overvaluation" of silver was corrected, and prices returned to a more reasonable level based on fundamentals. However, even so, there is still a significant gap between the current silver price and its reasonable value based on fundamentals. This gap is closely related to the continued high valuation of gold. As long as the high valuation of gold is maintained, silver prices are expected to continue to benefit from the pull of gold and temporarily maintain a high level.
Despite clearly pointing out the risk of silver being overvalued, Commerzbank maintains a bullish view on its long-term trend. It is understood that the German bank officially raised its price forecasts for gold and silver last month, based on its prediction of the Federal Reserve's monetary policy.
Commerzbank predicts that the Federal Reserve will begin a rate-cutting cycle in the second half of this year, and that this policy will significantly benefit the precious metals market. On the one hand, rate cuts will reduce the opportunity cost of holding precious metals, increasing their investment appeal; on the other hand, rate cuts may lead to a weaker dollar, further driving up the prices of dollar-denominated precious metals. Based on this prediction, the bank believes that rate cuts will push gold prices back above $5,000 per ounce, and driven by higher gold prices, silver prices will also rise, expected to reach $90 per ounce.
In summary , while silver prices are currently in a relatively stable range, the risk of overvaluation cannot be ignored. Its upward momentum relies heavily on gold and lacks fundamental support. However, thanks to the safe-haven appeal of gold and the expectation of a Federal Reserve rate cut, silver prices are likely to maintain their strength in the short term.
For investors, it is necessary to be wary of the potential risks of a silver price correction, while closely monitoring gold price trends, Federal Reserve policies, and changes in the geopolitical situation, and making reasonable investment arrangements.
Spot silver daily chart source: EasyForex
At 13:09 Beijing time on April 22, spot silver was quoted at 78.08 yuan/ounce.
Silver prices have gradually found support in the $78-$80 per ounce range, showing a relatively stable trend. However, behind this seemingly stable situation lies the potential risk of a significant correction. A recent precious metals research report released by Commerzbank has explicitly questioned the current valuation of silver prices, while also providing predictions for future price movements, attracting widespread market attention.
Silver prices stabilize in key range; institutions warn of overvaluation risks.
As of now, international silver prices have generally stabilized, remaining within the range of $78 to $80 per ounce. Market trading has been relatively stable, with bulls and bears currently in a state of equilibrium. However, this stability has not dispelled institutional concerns about silver prices. Commerzbank explicitly stated that current silver prices face significant overvaluation risks and may face substantial downward pressure in the future.
In her latest precious metals research report, Thu Lan Nguyen, Head of FX and Commodities Research at Commerzbank, explicitly points out that from a fundamental perspective, there is a significant gap between the fair value of silver and its current market price. Her fair value is closer to $40 per ounce, rather than the current level of $78 to $80 per ounce. This view implies that the current silver price has deviated from fundamental support, is clearly overvalued, and the pressure for a subsequent correction should not be ignored.
The unusual upward momentum in silver prices is not due to economic fundamentals.
In her report, Ruan Qiulan further explained the core reasons for the current overvaluation of silver prices. She stated that the current rise in silver prices is not driven by economic fundamentals, but rather relies more on the upward momentum of gold prices, and has a low correlation with core economic fundamentals such as bond yields and the US dollar exchange rate.
She further added, "Silver prices are largely driven by gold prices. This round of increases is mainly because silver was previously undervalued relative to gold. In fact, the fair value of silver calculated after incorporating gold price factors is more consistent with the actual price trend." This statement clearly indicates that the current price trend of silver lacks its own fundamental support and is more of a passive rise following the upward trend of gold. The sustainability of this upward trend is questionable.
Overvaluation has not halted the upward trend; support for gold becomes key.
Although Commerzbank clearly believes that silver is already overvalued, Ruan Qiulan also stated that the current upward trend in silver prices is unlikely to end in the short term, as its core supporting factor is the continued strength of gold prices and gold's safe-haven properties.
She pointed out that gold, as a globally recognized safe-haven asset and an important tool for hedging against high geopolitical uncertainty, remains strongly supported. Research by Commerzbank also shows that gold's safe-haven appeal stems primarily from strong demand from central banks. In the current complex geopolitical environment, gold is seen as a neutral, non-politicized monetary asset, becoming an important choice for central banks' reserve asset allocation, which provides solid support for gold prices.
Meanwhile, although gold prices have fluctuated somewhat in recent weeks and faced some downward pressure, this is not because gold has lost its safe-haven properties. Rather, it's due to central banks and investors using gold as a source of liquidity, leading to a temporary sell-off. Ruan Qiulan emphasized that this liquidity sell-off has not weakened gold's safe-haven value, and gold's continued strength will continue to support silver prices.
The Iranian conflict has led to some overestimation, and silver prices still deviate from fundamentals.
It is worth noting that since the outbreak of the conflict in Iran, the silver market has undergone some adjustments, and the overvaluation situation has been alleviated to some extent. Ruan Qiulan stated in the report: "It is worth noting that since the outbreak of the conflict in Iran, the valuation of silver calculated by our model excluding gold price factors has remained relatively stable, and the pullback it predicted has been far less than the actual decline."
She further explained that after the outbreak of the conflict in Iran, some of the "overvaluation" of silver was corrected, and prices returned to a more reasonable level based on fundamentals. However, even so, there is still a significant gap between the current silver price and its reasonable value based on fundamentals. This gap is closely related to the continued high valuation of gold. As long as the high valuation of gold is maintained, silver prices are expected to continue to benefit from the pull of gold and temporarily maintain a high level.
Institutions maintain a bullish stance, with expectations of interest rate cuts becoming a driving force for future growth.
Despite clearly pointing out the risk of silver being overvalued, Commerzbank maintains a bullish view on its long-term trend. It is understood that the German bank officially raised its price forecasts for gold and silver last month, based on its prediction of the Federal Reserve's monetary policy.
Commerzbank predicts that the Federal Reserve will begin a rate-cutting cycle in the second half of this year, and that this policy will significantly benefit the precious metals market. On the one hand, rate cuts will reduce the opportunity cost of holding precious metals, increasing their investment appeal; on the other hand, rate cuts may lead to a weaker dollar, further driving up the prices of dollar-denominated precious metals. Based on this prediction, the bank believes that rate cuts will push gold prices back above $5,000 per ounce, and driven by higher gold prices, silver prices will also rise, expected to reach $90 per ounce.
In summary , while silver prices are currently in a relatively stable range, the risk of overvaluation cannot be ignored. Its upward momentum relies heavily on gold and lacks fundamental support. However, thanks to the safe-haven appeal of gold and the expectation of a Federal Reserve rate cut, silver prices are likely to maintain their strength in the short term.
For investors, it is necessary to be wary of the potential risks of a silver price correction, while closely monitoring gold price trends, Federal Reserve policies, and changes in the geopolitical situation, and making reasonable investment arrangements.
Spot silver daily chart source: EasyForex
At 13:09 Beijing time on April 22, spot silver was quoted at 78.08 yuan/ounce.
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