In 2026, the gap between supply and demand will only widen, writes Bloomberg with reference to the forecast of the Silver Institute. The deficit will grow by 15% to 46.3 million troy ounces. The market is increasingly experiencing a shortage of metal, despite multidirectional trends in demand.
Betting on investment silver
The main driver is investors. Demand for silver bars and coins will jump by 18%. Against the background of unstable global economy and geopolitical risks, silver is again perceived as a “safe haven” and the main instrument of capital preservation.
But the picture is not homogeneous. Overall demand for the metal, on the contrary, may shrink by 2%. The pressure comes from industry, the jewelry sector, photography and silverware production – here a decline is being recorded.
The silver deficit will be covered by the “secondary market”
On the supply side, the situation also remains tense. The institute predicts a decrease in total supply by the same 2% in 2026. This is due to both a slight decline in production and a decrease in hedging activity by producers. Partially offsetting the drop in supply will be the growth in secondary silver processing, which is estimated to increase by 7%.
Geopolitics adds additional intrigue to the market. Tensions around Iran are already affecting short-term price expectations. However, the Silver Institute believes that the long-term trend remains positive.
Even if the conflict drags on, investors will start to move into defensive assets. Weakening economic growth and lower real bond yields may play into the hands of precious metals.
Experts emphasize that a possible return of interest in “safe havens” may support precious metals prices, especially if sell-offs continue in riskier markets.
