Silver Price Forecast 2026: What Supply Squeeze and Demand Surge Mean for Investors

Silver has delivered a remarkable performance in 2025, with the metal surging from below US$30 in January to above US$64 per ounce by December—a move not witnessed in more than four decades. This spectacular rally reflects a fundamental market shift: while industrial demand accelerates and investors seek safe-haven assets, global silver supplies continue to disappoint, creating a tightening that will likely define the silver price forecast for 2026 and beyond.

The fourth quarter spike was particularly dramatic, with silver breaking through the US$64 barrier following the Federal Reserve’s interest rate cuts. That move signals something deeper than typical commodities trading. It reflects how silver is functioning as real money for investors worried about currency debasement, geopolitical turmoil, and the durability of current monetary policy.

From Structural Deficit to Physical Tightness: Understanding Silver’s Supply Crisis

The supply story is perhaps the most compelling thread running through the silver price narrative. Metal Focus, a prominent commodities research firm, forecasts that 2025 will mark the fifth consecutive year of a silver supply deficit, with shortfall reaching 63.4 million ounces. Though that figure is expected to contract to 30.5 million ounces in 2026, the firm remains confident that deficits will persist.

This isn’t a temporary supply hiccup. Silver faces what experts call a “structural” supply problem. The global silver supply deficit is rooted in a multi-year mining output shortfall that refuses to align with surging industrial and investment demand. Aboveground silver stocks—the reserves that typically buffer market disruptions—are depleting at an accelerating pace.

One key reason: approximately 75 percent of silver is mined as a by-product of other metals including gold, copper, lead, and zinc. When silver represents only a small slice of a mining operation’s revenue stream, producers have little incentive to boost silver output specifically. Higher silver prices alone won’t solve this—miners can’t simply flip a switch. Instead, the industry faces a 10 to 15-year lag from discovery to production for new deposits. The market’s reaction time to price signals is “really, really slow,” as Peter Krauth of Silver Stock Investor notes, meaning supply-demand tightness should persist well into 2026 and beyond.

Silver mine production has also declined over the past decade, particularly in the major silver-mining regions of Central and South America. Even at record prices, bringing new supply online will take years.

The Demand Explosion: Why Cleantech, AI, and Renewable Energy Are Reshaping Silver’s Story

If supply is the constraint, demand is the accelerator. Industrial consumption is driving much of silver’s strength, and this tailwind is expected to intensify throughout 2026.

The silver price forecast for 2026 must account for three mega-trends: renewable energy deployment, artificial intelligence infrastructure expansion, and the ongoing transition to electric vehicles. According to the Silver Institute’s recent report on “Silver, the Next Generation Metal,” demand from the cleantech sector—particularly solar panels and EV batteries—will remain robust through the end of the decade. Meanwhile, AI and data center buildout, an emerging yet rapidly expanding consumption source, will add another layer of demand pressure.

The mathematics are sobering. Roughly 80 percent of all data centers globally are located in the United States, and electricity demand to power these facilities is projected to climb 22 percent over the next decade. On top of that baseline, AI computing alone is expected to drive another 31 percent surge in electricity consumption. Over the past year, US data centers have chosen solar energy to power their operations five times more frequently than nuclear alternatives—a telling shift that amplifies silver’s role in the global energy transition.

Frank Holmes of US Global Investors emphasizes that silver’s “ability to be a transformative part of renewable energy,” particularly within solar photovoltaic systems, represents an outsized factor in the recent price rally. This secular trend won’t disappear in 2026. The risk of underestimating future silver demand from these industries—especially as solar capacity expands and AI infrastructure proliferates—is substantial.

Meanwhile, emerging markets like India, the world’s largest silver consumer, are experiencing a shift toward silver jewelry and bars as an affordable alternative to gold, which now exceeds US$4,300 per ounce. India imports roughly 80 percent of its silver demand, and strong domestic appetite is already straining London inventory levels.

Investment Demand and the Race for Physical Metal

The investment dimension amplifies supply pressures further. As monetary uncertainty grows and investors seek non-yielding assets to preserve wealth, silver exchange-traded funds (ETFs) have seen extraordinary inflows. In 2025 alone, silver-backed ETF inflows reached approximately 130 million ounces, pushing total ETF holdings to roughly 844 million ounces—an 18 percent increase for the year.

These flows reflect real portfolio hedging demand. Concerns about Federal Reserve independence, the potential replacement of Fed Chair Jerome Powell, and expectations for looser monetary policy have made silver a genuine safe-haven play alongside gold. Unlike interest-bearing assets, silver offers no yield—but it offers what many investors view as insurance against currency dilution and geopolitical risk.

The physical tightness is already evident. Silver bar and coin mints have reported shortages, and futures market inventories—especially in London, New York, and Shanghai—remain lean. Shanghai Futures Exchange silver inventories hit their lowest level since 2015 in late November. These constraints are pushing lease rates and borrowing costs higher, signaling genuine delivery challenges rather than mere speculative positioning.

As Julia Khandoshko, CEO of Mind Money, notes: “Right now, the market is characterized by real physical scarcity: global demand is outpacing supply, India’s buying has drained London stocks and ETF inflows are tightening things even more.”

The Silver Price Forecast for 2026: Expert Views and Downside Risks

So where does silver head in 2026? The metal’s reputation for high volatility—earning it the nickname “the devil’s metal”—makes pinpointing a single price target hazardous. Still, the fundamental case for sustained or higher prices appears robust.

Peter Krauth views the US$50 level as the new price floor and offers a “conservative” forecast of silver reaching the US$70 range in 2026. This aligns closely with Citigroup’s prediction that silver will continue outperforming gold and reach toward US$70 for the year, assuming industrial fundamentals hold steady.

More bullish forecasters see silver reaching US$100 by end-of-year 2026. Frank Holmes and Clem Chambers of aNewFN.com, who refers to silver as the “fast horse” of precious metals, both advocate for triple-digit prices. Chambers argues that retail investment demand is the true “juggernaut” powering the silver price story.

However, risks deserve acknowledgment. A global economic slowdown could dampen industrial demand. Sudden liquidity corrections or a reversal in safe-haven flows could trigger rapid drawdowns—and silver, being volatile by nature, could see sharp reversals despite longer-term bullish fundamentals.

Khandoshko advises watching industrial demand trends, Indian import patterns, ETF flows, and price divergences between major trading hubs. She also warns to monitor sentiment around large unhedged short positions; if confidence in paper contracts erodes again, another structural repricing could unfold.

For investors, the 2026 silver price forecast hinges on a delicate balance: whether supply constraints and industrial demand growth can overcome potential macro headwinds and deliver the higher prices that bullish forecasters expect.