What's Driving Silver Higher in 2026? Market Fundamentals Point to Continued Upside

The white metal’s dramatic 2025 performance — surging from under $30 in January to over $60 by year-end — raises a natural question: is silver projected to go up further into 2026? A closer look at three structural forces suggests the answer leans bullish.

The Supply Squeeze That Won’t Quit

Silver’s scarcity story remains the foundation of the 2026 outlook. Metal Focus forecasts a fifth consecutive year of supply deficit in 2025, with a shortfall of 63.4 million ounces. While that gap is expected to narrow to 30.5 million ounces in 2026, the deficit persists — a critical point for understanding silver’s price trajectory.

The crux of the problem: roughly 75% of silver comes as a byproduct of copper, gold, lead and zinc mining. When silver represents only a fraction of miners’ revenue streams, higher prices alone don’t incentivize increased production. Worse, miners often shift to processing lower-grade ore when prices spike, which can actually reduce silver supply hitting the market.

On the exploration side, bridging the supply gap takes 10-15 years from discovery to production. Aboveground inventories continue declining, especially in major mining regions across Central and South America. As one commodities expert put it, even at all-time highs, rebalancing the market could take years — meaning scarcity-driven price support should persist throughout 2026.

Industrial Demand: The Unstoppable Growth Driver

The cleantech and artificial intelligence sectors are reshaping silver demand patterns. The Solar Institute’s recent analysis highlights how heavy silver consumption through 2030 stems from solar panels, electric vehicles, and data center infrastructure.

Consider the data center angle: approximately 80% of US data centers are located domestically, with electricity demand projected to grow 22% over the next decade. AI applications alone are expected to add another 31% to power consumption. Tellingly, US data centers selected solar energy over nuclear options five times more frequently in the past year, directly translating to surging silver demand.

India’s market dynamics amplify this trend. As the world’s largest silver consumer, India already imports 80% of its silver demand. With gold prices now exceeding $4,300 per ounce, Indian buyers increasingly turn to silver jewelry and bars as affordable wealth preservation alternatives. This geographic demand shift is draining London inventory stocks and adding structural support to prices.

Investment Flows: The Modern Multiplier

Beyond industrial consumption, financial investment is rewriting silver’s demand picture. Exchange-traded fund inflows hit approximately 130 million ounces in 2025, lifting total ETF holdings to roughly 844 million ounces — an 18% increase year-over-year.

This institutional and retail momentum reflects silver’s role as both a safe-haven asset and an inflation hedge. With Federal Reserve independence concerns and potential policy shifts ahead, investors are rotating into non-interest-bearing precious metals. The result: mint shortages in physical bars and coins have become commonplace, while futures market inventories in London, New York and Shanghai hit multi-year lows.

Shanghai Futures Exchange silver stocks recently hit their lowest level since 2015, signaling genuine physical tightness rather than speculative positioning. Rising lease rates and borrowing costs confirm delivery pressures remain real.

2026 Price Projections: Where Analysts Draw the Line

Silver’s volatility — earning its “devil’s metal” nickname — makes precise forecasting hazardous. Yet consensus leans decidedly higher for 2026.

Conservative estimates place silver in the $70 range, with $50 emerging as the new floor support level. More aggressive forecasts suggest silver could approach $100 per ounce if industrial fundamentals hold and retail investment demand accelerates.

Risks worth monitoring: a global economic slowdown could pressure prices downward, as could sudden liquidity corrections. Widening price gaps between trading hubs or weakened confidence in paper contracts could also trigger structural shifts. Still, the combination of supply deficits, rising industrial demand, and ETF inflows creates a compelling case for why silver is projected to go up in 2026.

The convergence of these three forces — persistent shortage, accelerating industrial use, and defensive capital flows — suggests the metal’s remarkable 2025 story may be just the opening chapter.