Silver supply gap is expected to shrink in 2026, prompting UBS to lower its price forecasts, according to Kitco News. The market has run a structural deficit for several years, and analysts now see that shortfall narrowing as high prices curb some demand and lift recycling. UBS cut its year end silver target to 80 dollars per ounce from 85 dollars, and set an end of second quarter forecast near 85 dollars, down from an earlier 100 dollar view.
The revisions follow a volatile stretch in which silver reached a record high above 121 dollars per ounce early in the year before pulling back sharply. Even with the deficit easing, the market remains in shortfall, its sixth consecutive year of drawing on above ground stocks to bridge the gap between mine supply and industrial and investment demand. Industrial use, led by solar manufacturing and electronics, continues to anchor consumption, while retail investors have kept buying coins and bars.
Analysts note that silver often tracks gold during macroeconomic uncertainty while carrying an added industrial component that ties it to the pace of manufacturing. The lowered targets reflect expectations of softer demand growth and a more balanced market later in the year, though the persistent deficit and thin inventories leave room for renewed volatility if investment flows return or industrial orders surprise higher.
Source: Kitco News - https://www.kitco.com/news/article/2026-05-14/silver-price-outlooks-chopped-supply-deficit-forecasted-narrow