Silver's structural supply deficit extended to a sixth consecutive year in 2025 and is expected to persist through 2026, with cumulative drawdowns from above-ground inventories exceeding 762 million ounces over the deficit period. The supply shortfall reflects mining output that consistently falls below combined industrial, investment, and jewelry demand, with industrial applications driven by solar panel production, electronics, and emerging electric vehicle components representing the fastest-growing demand categories.
HSBC raised its 2026 silver price forecast to an average of $75 per ounce, citing the ongoing supply deficit and growing industrial consumption. Spot silver traded as high as $85.44 in May 2026 before pulling back to the mid-$70s range on dollar strength. The bank's 2027 average forecast of $68 per ounce implies a gradual normalization from current elevated levels if supply conditions improve.
The Silver Institute projects global silver demand at approximately 1.2 billion ounces in 2026, while primary silver mine supply is estimated at roughly 820 million ounces. The 380 million ounce gap is partially bridged by recycling and secondary recovery, but the structural imbalance has persisted because new mine development timelines typically span 8 to 12 years from discovery to production.
US silver consumption in industrial applications totaled approximately 170 million ounces in 2025, accounting for roughly 14 percent of global industrial demand. American Silver Eagle coin sales from the US Mint have remained elevated, with investors continuing to seek physical silver as a portfolio diversification instrument alongside record gold prices.
Source: Kitco -- https://www.kitco.com/news/precious-metals