Silver mining and processing infrastructure in a rugged Moroccan landscape.
By Charles Pitts
Silver enters 2026 with two competing forces shaping its outlook. The first is a structural market deficit: global demand is expected to exceed supply for a sixth consecutive year. The second is the risk that elevated prices begin to weaken demand, particularly in solar manufacturing, where producers are reducing the amount of silver used in photovoltaic cells and exploring substitutes.
That tension explains why silver forecasts span a wide range. Major-bank estimates generally cluster between roughly $60 and $100 per ounce, while more aggressive ratio-based scenarios reach well above $100. For operators, investors and policymakers, the key issue is not simply whether silver rises or falls. It is whether constrained mine supply and investment demand can offset industrial thrifting and substitution.
Silver price outlook: the forecast range
J.P. Morgan Global Research forecasts an average silver price of $81 per ounce in 2026, with quarterly estimates ranging from $75 to $85. The bank also cautions that silver’s smaller market size and high industrial exposure can produce sharper price movements than gold.
Other institutional forecasts are more conservative. UBS estimates an average in the mid-$60s in some recent guidance, while HSBC’s published forecasts have generally fallen in the high-$60s to mid-$70s range. A Reuters analyst poll has been cited near $78 per ounce, while Goldman Sachs forecasts have been reported in an $85–$100 range. Citi’s work is more tactical, with upside targets around $100 to $150 during periods of tight physical supply.
| Forecast source | 2026 view | What it implies |
|---|---|---|
| UBS | Approximately $60–$65 average | Demand weakness and a normalisation in investment flows |
| HSBC | Approximately $68–$75 average | Persistent deficit, but improving recycling and substitution |
| Reuters analyst poll | Approximately $78 average | Broad market consensus around the high-$70s |
| J.P. Morgan | $81 average | Tight supply and industrial demand support, offset by volatility |
| Goldman Sachs | $85–$100 range | Stronger strategic demand and tight above-ground inventories |
| Citi | $100–$150 tactical upside | A higher-volatility scenario tied to physical tightness and investor inflows |
These estimates are not directly comparable because they were published at different points in the market cycle and use different assumptions for mine output, recycling, investment demand and the gold-silver ratio. The more useful conclusion is that the central forecast range sits around $70–$90 per ounce, while the risk distribution remains unusually wide.
The sixth consecutive deficit
The Silver Institute’s 2026 outlook, based on Metals Focus research, identifies a sixth consecutive annual market deficit. Its preliminary estimate placed the shortfall at approximately 67 million ounces, while the later World Silver Survey 2026 estimate is closer to 46.3 million ounces.
The difference reflects changing assumptions rather than a disagreement over the market’s direction. Both estimates point to demand exceeding supply and to continued reliance on above-ground inventories.
| Supply-demand indicator | 2026 estimate | Market significance |
|---|---|---|
| Market balance | 46.3 Moz deficit in the final survey; earlier estimate around 67 Moz | Sixth consecutive annual shortfall |
| Industrial fabrication | About 639.6–650 Moz | Slight decline, but still historically high |
| Physical investment | About 227 Moz | Approximately 20% increase in bars and coins |
| Mine production | Roughly 820–844 Moz, depending on forecast vintage | Flat to modestly higher, with limited elasticity |
| Recycling | More than 200 Moz | Approximately 7% growth, helped by higher prices |
| Total supply | Around 1.05 billion ounces in preliminary estimates | Growth is driven mainly by recycling rather than new mines |
The distinction between mine supply and total supply is important. Silver recycling can respond relatively quickly to higher prices, but mine supply is slower to adjust. Much of the world’s silver is produced as a by-product of copper, lead, zinc and gold mining. J.P. Morgan estimates that only about 30% of mined silver comes from primary silver mines.
That makes supply less responsive to a silver price rally. A higher silver price does not automatically cause a copper or zinc producer to expand output. New mines also face long permitting timelines, capital requirements, infrastructure constraints and geological risk.
Photovoltaic manufacturing remains a major source of industrial silver demand.
Solar demand is both a support and a risk
Silver is used in photovoltaic cells because of its high electrical conductivity. Solar installations are still expanding globally, and the broader energy transition continues to support demand from power systems, electronics, electric vehicles and data centres.
However, solar manufacturers are under pressure to reduce input costs. The Silver Institute expects industrial fabrication to decline in 2026 despite continued growth in solar installations. The main reasons are thrifting, or using less silver per cell, and substitution, including the development of copper-based and silver-free technologies.
J.P. Morgan describes industrial applications as accounting for roughly 60% of silver demand excluding exchange-traded fund flows. Its analysts also warn that high silver prices could accelerate substitution. That creates an unusual market dynamic: higher prices can tighten supply in the short term while weakening the growth rate of demand over time.
The outcome will depend on the speed of technology change. If solar manufacturers reduce silver intensity gradually, the impact may be absorbed by growth in installed capacity. If substitution advances quickly, the market’s expected deficit could narrow faster than current forecasts suggest.
Other industrial uses offer some offset. Silver is used in circuit boards, electrical contacts, brazing alloys, automotive systems and high-performance electronics. Growth in artificial intelligence infrastructure and data centres could provide additional demand, although these applications are generally more sensitive to global capital spending cycles.
Investment demand could decide the price
Investment demand is the most volatile component of the silver balance. The Silver Institute expects physical investment in bars and coins to rise about 20% to approximately 227 million ounces in 2026. That increase could offset softer industrial, jewellery and silverware demand.
The market’s sensitivity to investment flows is amplified by silver’s smaller size. A relatively modest change in exchange-traded product holdings, futures positioning or retail purchases can have a disproportionate impact on price. This is one reason silver can move sharply even when industrial consumption changes only gradually.
Geopolitical uncertainty, currency concerns, interest-rate expectations and the direction of gold are likely to remain important. Silver tends to benefit when precious metals attract capital, but it can also decline more sharply than gold when monetary conditions tighten or speculative positions are unwound.
Physical liquidity is another variable. Several industry reports have highlighted tight conditions in parts of the London market and the movement of metal between regional hubs. A renewed surge in demand, a tariff-related disruption or a sharp increase in exchange inventories could create significant short-term volatility.
The gold-silver ratio: a useful valuation guide
The gold-silver ratio measures how many ounces of silver are required to buy one ounce of gold. A high ratio generally indicates that silver is underperforming gold; a lower ratio indicates stronger relative performance by silver.
Long-term estimates of the modern equilibrium vary, but research from the Silver Institute places the mean-reverting level just below 60:1. Other market studies use a broader 60:1 to 65:1 range.
Using a gold price near $4,500 per ounce, different ratio assumptions produce the following silver values:
| Gold-silver ratio | Implied silver price at $4,500 gold | Interpretation |
|---|---|---|
| 75:1 | $60 | Bear case or silver underperformance |
| 65:1 | $69 | Near modern historical norms |
| 55:1 | $82 | Base-case compression with stronger silver demand |
| 45:1 | $100 | Bull case with sustained investment inflows |
| 32:1 | $141 | Extreme historical-style compression |
The ratio should not be treated as a standalone price target. Silver does not have the same central-bank demand base as gold, and its industrial exposure makes it more sensitive to economic growth. Still, it provides a framework for testing whether a forecast assumes moderate or extreme silver outperformance.
Base, bull and bear cases
Base case: $70–$90 per ounce
The base case assumes the sixth consecutive deficit remains in place, physical investment demand stays firm and mine supply grows only modestly. Solar thrifting continues, but does not eliminate the benefit of rising installations. Gold remains supportive, while the gold-silver ratio trades broadly between 55:1 and 70:1.
This is consistent with the high-$70s to low-$80s consensus and J.P. Morgan’s $81 average forecast.
Bull case: $100–$150 per ounce
The bull case requires several factors to align: continued gold strength, renewed retail and institutional buying, tight exchange inventories, slower-than-expected substitution in solar and disappointing mine supply.
A ratio near 45:1 with gold around $4,500 would imply silver near $100. A move toward 32:1 would imply a price above $140, but that would represent a much more extreme outcome associated with powerful precious-metals momentum and limited physical liquidity.
Bear case: $55–$65 per ounce
The bear case assumes investment demand normalises after a strong period, the U.S. dollar strengthens, interest rates remain restrictive and solar manufacturers accelerate substitution. Recycling would increase as higher prices encourage scrap flows, while industrial demand weakens.
In this scenario, the deficit narrows materially or is temporarily offset by inventory releases. A gold-silver ratio closer to 70:1 or 75:1 would be consistent with silver prices in the $60 range.
Morocco adds exploration optionality, not immediate supply
Aya Gold & Silver’s expansion in Morocco illustrates the longer lead time behind future silver supply. The company recently acquired three exploration projects covering approximately 259.1 square kilometres, expanding its Moroccan land package to more than 991 square kilometres.
The portfolio includes:
- Zagora: 158.6 square kilometres, prospective for nickel, cobalt, lead, zinc, silver and gold.
- Agadir-Melloul: 68.5 square kilometres, prospective for copper, silver, gold and rare earth elements.
- Goulmim: 32 square kilometres, prospective for lead, silver, copper and gold.
Aya plans an 18-to-24-month greenfield programme involving stream-sediment geochemistry, hyperspectral studies, mapping and prospecting before potential geophysics and drilling. The company’s expansion is strategically relevant, but it should not be treated as near-term market supply. Exploration success, resource definition, permitting, financing and construction would all be required before production could materially affect the global balance.
Greenfield exploration can expand future supply, but development timelines remain lengthy.
What matters most for decision-makers
The 2026 silver outlook is constructive but highly sensitive to assumptions. The strongest support comes from six years of deficits, limited primary mine supply, investment demand and silver’s role in electrification. The main risks are substitution in photovoltaic manufacturing, recycling growth, weaker economic activity and a reversal in precious-metals positioning.
For a broader market comparison, see Skillings’ silver market forecast and its copper price outlook.
The most defensible central view is therefore a $70–$90 per ounce range, with upside toward $100 or more if physical tightness and investment demand intensify. The market’s long-term deficit supports the outlook, but the path is unlikely to be smooth: and higher prices may ultimately encourage the technologies and recycling flows that limit the rally.
