I am following the projections of the World Silver Association and a very interesting scenario is unfolding in the silver market. According to the report released this week, we are heading into the sixth consecutive year of a global market deficit, and things are only expected to worsen in 2026.

The supply deficit is expected to grow by 15%, reaching 46.3 million troy ounces. Basically, supply is declining by 2%, mainly due to reduced mining, while recycling has increased by 7% but cannot fully offset this decline. Interestingly, demand for silver bars and coins has exploded by 18%, but industrial, photographic, and jewelry demand has fallen, so total consumption is expected to decrease by about 2%.

What stands out is that even with all this geopolitical instability, the association maintains a constructive outlook on silver for the rest of the year. They believe that conflicts in the Middle East should be contained and that monetary tightening to control inflation is temporary. This scenario makes sense: if the war continues, concerns about weak growth and fiscal pressure could push real yields on bonds lower, which naturally boosts non-yielding metals like silver and gold.

Some people are viewing this as an opportunity, especially with silver ETFs gaining more attention from investors. The combination of a recovery in safe-haven asset demand with cyclical market liquidation should bring back interest in gold and silver. If you're thinking about exposing yourself to precious metals, silver funds via ETFs can be an interesting way to participate in this movement without dealing with physical storage. It’s worth monitoring how this evolves in the coming months.