What Lies Ahead: Key Market Drivers Expected to Shape Silver Price Target in 2026

Silver staged a remarkable comeback in 2025, surging from below US$30 in early January to breach US$60 by year-end—a move that underscores an increasingly constrained market. The white metal hit its zenith in mid-December around US$64 per ounce following a rate cut announcement by the Federal Reserve. With investors actively seeking non-yielding assets to preserve capital during periods of monetary flux, precious metals exchanges are struggling to replenish depleted silver stocks. As 2026 unfolds, market watchers are carefully monitoring how policy shifts, geopolitical tensions, and evolving supply-demand mechanics could reshape the silver landscape.

The Market’s Structural Imbalance: Why Supply Can’t Keep Pace

At the heart of silver’s dramatic ascent lies a persistent supply crunch. According to Metal Focus forecasts, 2025 marked the fifth consecutive year of silver supply deficit, with a shortfall of 63.4 million ounces. While that gap is projected to narrow to 30.5 million ounces in 2026, the deficit is expected to remain a defining characteristic of the market throughout the year.

Peter Krauth, who advises on silver market dynamics, emphasizes that this isn’t a temporary imbalance but a deeply rooted structural problem. Silver production has contracted over the past decade, particularly in the major mining regions of Central and South America. The core issue: approximately 75 percent of silver output emerges as a byproduct of mining operations focused on gold, copper, lead, and zinc. When silver represents only a minor revenue stream, mining companies lack sufficient incentive to ramp up extraction, even as prices climb to levels unseen in decades. Higher pricing could paradoxically reduce silver supply, as miners potentially shift focus to lower-grade ore that contains less of the white metal.

The exploration timeline compounds this challenge. Bringing a newly discovered silver deposit from initial discovery through to commercial production typically requires 10 to 15 years—a lag that prevents rapid market response to current price signals.

Aboveground inventories are dwindling as well. Notably, silver stocks at the Shanghai Futures Exchange hit their lowest level since 2015 in late November, signaling genuine physical tightness rather than mere paper positioning. This scarcity is driving up lease rates and borrowing costs across major trading hubs in London, New York, and Shanghai.

Where Growth Demand Is Originating: Solar, EVs, and AI Infrastructure

Beyond investment flows, industrial consumption is fundamentally reshaping the silver landscape. The cleantech sector—encompassing solar installations and electric vehicle manufacturing—represents the most visible demand driver. As the US government recently designated silver as a critical mineral, recognition of its irreplaceable role in advanced technologies has intensified.

Data center expansion in the United States presents an emerging mega-demand scenario. Approximately 80 percent of global data centers concentrate in the US, and their electricity demand is forecast to climb 22 percent over the next decade. Artificial intelligence infrastructure alone is projected to spike energy consumption by 31 percent. Notably, US data centers have selected solar power five times more frequently than nuclear options over the past year—a trend that promises substantial incremental silver demand.

The silver price target for coming years appears increasingly supported by these secular industrial trends. Frank Holmes of US Global Investors highlights solar’s outsized contribution to silver demand growth, emphasizing that this tailwind shows no signs of reversing. Similarly, Alex Tsepaev from B2PRIME Group underscores how renewable energy proliferation and accelerating EV adoption will continue bolstering silver consumption.

“It is dangerous to underestimate the demand pipeline ahead,” Krauth cautions, reflecting the view that industrial applications remain significantly underpenetrated.

Investment Safe-Haven Buying: The Second Pillar of Demand

As monetary policy uncertainty and geopolitical risks escalate, silver has rekindled its historic role as a store of wealth. The metal benefits from the same tailwinds supporting gold: lower interest rates, potential new rounds of quantitative easing, Fed independence concerns, and a weaker US dollar environment.

Silver’s affordability compared to gold makes it particularly attractive to retail investors seeking portfolio diversification. ETF inflows have been staggering—approximately 130 million ounces flowed into silver-backed funds during 2025 alone, pushing total holdings to roughly 844 million ounces, representing an 18 percent increase.

India exemplifies this trend. As the world’s largest silver consumer and importer of 80 percent of its needs, Indian demand has intensified significantly. With gold prices now exceeding US$4,300 per ounce, buyers increasingly view silver jewelry as a more accessible alternative for wealth preservation. Indian ETF purchases and physical bar acquisitions have accelerated, and according to some market observers, Indian buying has substantially drained London inventory levels.

Concerns about Fed Chair Jerome Powell’s potential replacement in May with officials more aligned with lower rate expectations have amplified safe-haven positioning. This dynamic, combined with safe-haven ETF accumulation, has created mint shortages for both bars and coins—a tangible reflection of genuine scarcity rather than speculative excess.

Forecasting Silver’s Path: Conservative to Bullish Scenarios

Given silver’s notoriously erratic price behavior, analysts have adopted varying price forecasts rather than converging on a single target. The downside risks—potential economic slowdown, sudden liquidity corrections, or weakened confidence in paper contracts—could temporarily interrupt the uptrend.

Peter Krauth views US$50 as the new foundational support level, offering a “conservative” silver price target of US$70 for 2026. This aligns with Citigroup’s projection that silver will continue outperforming gold, potentially reaching above US$70 if industrial fundamentals remain robust. The bank anticipates sustained demand from the cleantech and technology sectors.

More optimistic analysts see greater upside. Frank Holmes projects silver could reach US$100 in 2026, driven by what he terms the “juggernaut” of retail investment demand. Clem Chambers of aNewFN.com shares similar bullish positioning, referring to silver as the “fast horse” among precious metals and emphasizing retail investor enthusiasm as the primary price catalyst.

Market observers note that investors should remain vigilant regarding industrial demand trajectories, Indian import flows, ETF accumulation patterns, and the relationship between major trading hubs. Sudden structural shifts in pricing mechanics remain possible, particularly if confidence in futures contracts undergoes renewed stress testing.

The silver price target framework for 2026 thus encompasses a wide range—from US$70 as a grounded forecast to US$100 as a more aggressive projection—reflecting genuine uncertainty about how competing forces will resolve themselves throughout the year.