I just saw the latest report from the World Silver Association, and there’s something quite interesting happening in the silver market that’s worth keeping an eye on.

So, basically, we are entering the sixth consecutive year of supply deficit, and the projection for 2026 is that this deficit will grow by 15%, reaching 46.3 million troy ounces. That’s quite significant when you stop to think about it.

The curious part is that while demand for silver bars and coins exploded by 18% ( and here comes the growing interest in silver ETFs and other forms of silver allocation ), industrial, photographic, and jewelry demand has fallen. Overall, total consumption is expected to decline by about 2%. Supply is also down by 2%, mainly because mining is weak and hedging has decreased, although recycling has partially offset this with a 7% increase.

What caught my attention is the tone of the report. Despite all the geopolitical uncertainty with the situation in Iran, the association maintains a constructive outlook on silver for the rest of the year. They believe these conflicts will be contained and that monetary tightening is temporary.

But here’s the most interesting point: even if the geopolitical situation worsens, there are solid arguments for precious metals like silver and gold to benefit. If economic growth slows down and fiscal pressure increases, real yields on bonds could fall, which historically favors interest-free assets like gold and silver. This could also boost interest in silver ETFs as a way to hedge against these uncertainties.

The report concludes that the combination of renewed demand for safe assets and cyclical market liquidation should reignite interest in both gold and silver. It’s a scenario that makes sense if you think about defensive allocation logic. Silver ETFs and other silver exposure instruments could be attractive for those looking to position themselves in this persistent supply deficit trend.