JPMorgan Chase recently updated its commodity outlook report on silver, lowering its previously high silver price forecast. This round of forecast adjustment is not just a simple numerical correction; it reflects the combined effects of a reversal in the physical supply and demand pattern of silver, weakening photovoltaic demand, and the global high-interest-rate environment suppressing precious metal valuations. Silver, which saw a doubling of its value in 2025, has seen a complete shift in its market drivers. Below, we analyze the reasons for this downward revision of forecasts based on institutional views, while also outlining the price dynamics and targets for silver in 2026 and 2027, as well as key signals that need to be continuously monitored. JPMorgan Chase's global research team has released its latest forecast: silver prices are expected to reach $63/oz in the fourth quarter of 2026, with an average price of $70/oz for the entire year of 2026 and $63/oz for the entire year of 2027. This shift in market structure is also pushing the gold-silver ratio back to a more historically common range, with gold once again becoming the dominant precious metal. Silver's price movements, besides closely following gold's fluctuations, are also largely influenced by the global interest rate environment. Once an interest rate hike cycle begins, the overall attractiveness of precious metals will significantly weaken. Looking back at this year's market, silver prices initially surged to a record high at the beginning of the year, but subsequently experienced a sharp correction. After June, silver prices fluctuated downwards, stabilizing in the $56-$58/oz range. JPMorgan Chase has also simultaneously lowered its previous price forecast: compared to the annual average price of $84/oz given in May, the latest forecast has been lowered to $70/oz. What is the logic behind this significant downward revision? What will the silver market look like in 2027? In 2026-2027, the core driving force influencing silver prices continued from 2025 into early 2026, resulting in a significant surge in silver prices. This was driven by multiple positive factors: a persistently tight supply of physical silver, coupled with a sharp rise in gold prices. Silver and gold prices are highly correlated, with stronger gold prices directly driving up silver prices. Gregory Shiller, Head of Base and Precious Metals Strategy at JPMorgan Chase, explained, "Last year, weak liquidity and tight supply in the physical silver market amplified silver's price elasticity. During the gold price rally, silver significantly outperformed gold." Under these market conditions, silver's annual increase in 2025 exceeded 130%. However, the market logic has now reversed. Shiller noted, "Silver valuations were already high, while the tight supply situation in the physical market has significantly eased, changing the market landscape. On trading days when gold falls, silver experiences even larger drops, completely reversing last year's 'maximum elasticity during rallies' scenario." Silver Price Forecast (Unit: USD/oz, Quarterly and Annual Averages) (Data Source: JPMorgan Commodities Research Department) Weak demand in major global import markets and the industrial sector drags down silver price expectations . The most crucial reason for this downward revision of silver price expectations lies in the significant fluctuations in silver demand within the photovoltaic (PV) sector. Silver is a core raw material for PV silver paste, which is responsible for capturing and conducting the current generated by solar cells, making it an indispensable material in the PV industry chain. Shiller analyzed: "China's silver imports surged in March this year, essentially due to market rush to stock up. The market anticipated the cancellation of the VAT refund policy for PV product exports starting in April, leading companies to stockpile in advance to lock in costs, pushing up short-term import data." However, after the policy was implemented, the industry chain quickly entered a destocking cycle, resulting in continued weakness in industrial silver demand. India, another major global silver importer, also faces shrinking demand. To alleviate pressure on foreign exchange reserves, India raised silver import tariffs and tightened silver import access rules, leading to a significant cooling of local silver purchasing enthusiasm after the policy was implemented. Technological advancements are also continuously reducing silver consumption in the PV industry. Photovoltaic silver reduction technology has rapidly become widespread in recent years, reducing the amount of silver required to produce a single PV panel. Shiller estimates that, considering various factors, silver demand in the photovoltaic sector is likely to decline by about 30% this year, a decrease of approximately 60 million ounces year-on-year. With the Fed raising interest rates/high interest rates persisting, the gold-silver ratio is gradually returning to normal. Shiller also emphasized the key indicator of the gold-silver ratio: the gold-silver ratio represents how many ounces of silver are needed to purchase one ounce of gold. At the end of January this year, the gold-silver ratio briefly fell below 45; it subsequently rebounded and is currently around 70. Compared to historical data, 70 is still relatively low, but compared to the beginning of 2026, it has clearly increased. Behind this increase in the ratio is the shift towards a more hawkish monetary policy from the Fed and many other central banks globally. To suppress persistent inflationary pressures, central banks may continue to raise interest rates. Higher Fed interest rates will increase the opportunity cost of holding non-interest-bearing assets like silver. Shiller explains that in a rising interest rate environment, funds are more willing to flow to assets that can continuously generate interest, such as government bonds, naturally reducing the demand for precious metals like silver and gold. Of course, gold is more resilient to price drops: while gold prices also face pressure during interest rate hike cycles, the long-term structural demand for gold purchases by central banks can buffer the extent of price declines. As the supply and demand in the physical silver market gradually reach equilibrium, JPMorgan Chase predicts that the gold-silver ratio will further converge towards 70 in the second half of 2026, and is expected to rebound to around 75 in 2027. To further monitor silver prices, pay close attention to these signals: To continuously predict the future trend of silver prices, focus on the following key variables: The tightness of supply and demand in the physical market: the supply and demand pattern in the physical market is the most fundamental basis for silver pricing; Gold price trends (silver and gold prices are highly correlated), while also observing the asymmetric fluctuations in silver: the difference in silver's elasticity during rising and falling markets; Silver consumption in the photovoltaic industry, and changes in purchasing demand from China and India, the two largest silver importers; Global interest rate trends, especially the pace of interest rate cuts by the Federal Reserve.