Can Silver Prices Go Up Further? What Drives the 2026 Outlook

Silver prices soared to their highest levels in four decades in 2025, and the momentum appears far from exhausted. The white metal’s climb from under $30 in January to over $60 by year-end wasn’t accidental—it reflects genuine structural imbalances in global markets. As investors enter 2026, the central question becomes clearer: what will silver prices do next? Multiple forces are converging to suggest the upward trajectory continues, though volatility remains the metal’s defining characteristic.

Three-Fold Supply Squeeze: The Foundation for Higher Silver Prices

The first pillar supporting silver’s advance is straightforward: the world simply cannot produce enough of the metal to meet demand. Metal Focus projects a fifth consecutive year of supply deficit in 2025, with a shortfall of 63.4 million ounces. While this is expected to narrow to 30.5 million ounces in 2026, the deficit shows no signs of disappearing anytime soon.

This structural shortage isn’t temporary. Silver mine production has declined steadily over the past decade, particularly in key producing regions of Central and South America. The fundamental problem stems from silver’s status as a by-product: approximately 75 percent of silver comes from mining copper, gold, lead, and zinc. When silver represents only a fraction of mining revenues, higher silver prices alone don’t incentivize increased production. Miners may even reduce output by processing lower-grade ore that once seemed uneconomical.

Adding another layer of constraint: bringing a new silver deposit from discovery through production takes 10 to 15 years. By the time supply responds to current price signals, market conditions will have shifted dramatically. Meanwhile, physical inventories are tightening across major trading hubs. Shanghai Futures Exchange silver stocks hit their lowest levels since 2015, reflecting the reality of genuine scarcity rather than speculative positioning.

Industrial and Investment Demand: Twin Engines Pushing Silver Higher

Supply deficits alone might not drive silver prices to new heights without corresponding demand growth. Yet demand is accelerating on multiple fronts.

Industrial consumption is the story of the moment. The Silver Institute’s recent report highlights explosive growth coming from renewable energy, particularly solar panels and electric vehicles. But these pale compared to the emerging behemoth: artificial intelligence and data center buildout. Data centers consume extraordinary amounts of electricity, and US facilities alone are expected to increase power demand by 22 percent over the next decade. AI applications, layered on top of standard data center operations, are projected to grow electricity consumption by an additional 31 percent. Remarkably, US data centers chose solar energy five times more frequently than nuclear options for new power generation capacity over the past year.

This industrial demand picture has prompted the US government to formally designate silver as a critical mineral—a recognition of its irreplaceable role in the technologies shaping the global economy.

Equally important is investment demand. As concerns mount over Federal Reserve independence and potential changes in monetary policy leadership, investors are actively repositioning into assets that don’t rely on interest rates. Silver, as an affordable alternative to gold, has captured massive flows. Exchange-traded funds tracking silver received inflows of approximately 130 million ounces in 2025 alone, pushing total ETF holdings to roughly 844 million ounces—an 18 percent increase for the year.

The combined effect: mint shortages for physical silver bars and coins have emerged, and lease rates for borrowed silver have climbed as market participants scramble to source metal. In India, traditionally the world’s largest silver consumer, rising demand for silver jewelry reflects how price-conscious investors are shifting from gold. With gold now trading above $4,300 per ounce, more affordable silver jewelry offers similar wealth-preservation appeal. India imports 80 percent of its silver demand, meaning Indian buying patterns directly impact global supply availability.

Expert Forecasts: Where Will Silver Prices Head in 2026?

Analysts are diverging on precise targets, primarily because silver’s volatility makes specific predictions hazardous. However, the directional bias leans firmly bullish.

The conservative forecast sees silver prices stabilizing at a minimum floor of $50 per ounce, with a target range in the $70s for 2026. This aligns with Citigroup’s projection that silver will continue outperforming gold and reach toward $70 if industrial fundamentals hold steady. More aggressive analysts see silver breaking through to $100 per ounce, citing the “juggernaut” of retail investment demand as the true price driver. One consistent theme: most major participants expect silver prices to remain firmly supported throughout 2026.

Risks and Realities: What Could Derail Silver Price Gains?

Despite the constructive setup, several headwinds could pressure silver prices in the coming months. A sudden global economic slowdown would dampen industrial demand from solar, EV, and data center sectors simultaneously. Unexpected liquidity corrections could trigger rapid drawdowns, as has happened historically with volatile commodities. Some analysts warn about the structural dangers lurking in large unhedged short positions in silver futures markets—should confidence in these derivatives weaken, forced unwinding could create pricing dislocations.

Additionally, divergence in silver prices between major trading hubs—London, New York, and Shanghai—creates arbitrage opportunities but also suggests underlying supply fragmentation. Should regional imbalances deteriorate further, local price spikes could emerge independently of global trends.

The Long-Term Equation for Silver Prices

Looking beyond 2026, the fundamentals suggest silver prices operate in a new regime characterized by structural undersupply meeting accelerating demand. The decade-long decline in mining production has created a multi-year deficit that cannot resolve quickly. Industrial demand from clean energy and AI will likely intensify, not diminish. And safe-haven investment flows will persist as long as macro uncertainty dominates investor sentiment.

For silver, 2026 appears positioned as another year where supply-demand imbalance and growth in strategic industries outweigh recessionary risks. While no commodity moves in a straight line—and silver earned its reputation for dramatic volatility—the question of whether silver prices can move higher seems to have a clear answer: yes. The real question becomes how high, and at what speed. Both remain open for debate.