Theme of the Day: Global Silver Investment to Remain Strong in 2026 – Silver Institute

These include tight physical supply in London, a volatile geopolitical backdrop, US policy uncertainty, and concerns over the Fed’s independence. In addition, silver’s underlying supply-demand fundamentals remain supportive. The silver market is expected to remain in deficit (total supply less demand) for a sixth consecutive year in 2026. Global silver demand is expected to remain largely unchanged in 2026, as healthy gains in retail investment are likely to offset most of the losses across other key demand segments, notably in jewellery, silverware, and industrial demand. Silver industrial fabrication is forecast to decline by 2% in 2026, to a four-year low of around 650Moz. As was seen last year, the weakness will be underpinned by developments in the photovoltaic (PV) sector. While global solar installations are expected to continue rising, ongoing thrifting and outright substitution away from silver will result in falling silver PV demand. Several silver applications continue to benefit from favourable structural growth trends. In particular, the expansion of data centres, artificial intelligence-related technologies, and the automotive sector are expected to support silver consumption across a range of industrial end-uses, partially offsetting the decline in PV-related demand. By contrast, physical investment is forecast to rise by 20% to a three-year high of 227Moz. After three consecutive years of decline, Western physical investment is expected to recover in 2026, as silver’s exceptional price performance and ongoing macroeconomic uncertainty rekindle investor interest. Investment demand in India is also likely to build on last year’s substantial gains amid positive investor sentiment. Total global silver supply is forecast to increase by 1.5% in 2026, reaching a decade high of 1.05Boz. In 2026, silver mine production is expected to increase by 1% to 820Moz, driven by stronger output from existing operations and recently commissioned projects. By-product silver from primary gold mines is forecast to grow in 2026. Silver recycling is projected to rise by 7%, with volumes surpassing 200Moz for the first time since 2012. Most scrap sources are expected to post high single-digit growth, led by silverware as consumers increasingly take advantage of elevated prices. Elevated geopolitical tensions, concerns over the Fed’s independence, and persistent uncertainty surrounding US policy have continued to support precious metals investment. Coin and bar demand has strengthened in recent months, while global ETP holdings stand at an estimated 1.31Boz. During this period, continuing physical tightness has further amplified upward price momentum. This reflects ongoing US tariff concerns, strong investment demand, and a persistent fundamental deficit that has been in place since 2021. As a result, the silver market is expected to remain in deficit in 2026 for the sixth consecutive year, at a noteworthy 67Moz. Of note, the global silver market will continue to rely on the release of bullion from above-ground inventories, adding pressure to an already tight physical market. Looking ahead, the global economic and geopolitical environment is likely to remain supportive for precious metals prices in 2026. In addition, physical liquidity in the London silver market may remain relatively tight. Furthermore, a still-supportive macroeconomic backdrop and forecasted strength in gold should help limit downside risks for the silver price, even though heightened price volatility will remain a feature for the foreseeable future.