Silver demand expected to outstrip supply

The global silver market is expected to run another structural deficit in 2026 as silver investment remains strong.

This was one of several articles featured in the Silver Institute’s most recent Silver News report.

According to the Silver Institute, the underlying factors that drove silver to over $100 remain in place. 

“These include tight physical supply in London, a volatile geopolitical backdrop, U.S. policy uncertainty, and concerns over the Federal Reserve's independence. In addition, silver's underlying supply-demand fundamentals remain supportive.” 

Silver demand is forecast to outstrip supply for the sixth straight year, driven by a 20 percent increase in physical investment offtake. 

Based on preliminary data compiled by the Silver Institute, silver demand outstripped supply by about 95 million ounces last year, leading to the fifth straight market deficit. Including last year’s shortfall, the 5-year market deficit will climb above 800 million ounces, an entire year of mining output.

The boost in investment demand will offset a modest decline in industrial offtake due to much higher prices. According to the Silver Institute, “While global solar installations are expected to continue rising, ongoing thrifting and substitution away from silver will result in falling silver PV demand.”

The Silver Institute expects the global economic and geopolitical environment to continue supporting precious metals this year. 

“Furthermore, a still-supportive macroeconomic backdrop and forecasted strength in gold should help limit downside risks for the silver price, even though price volatility will remain a feature for the foreseeable future.” 

The Silver Institute also reported some interesting technological developments in the world of silver.

• Researchers at Stanford University have discovered that covering electrolytes in lithium-ion batteries with a layer of silver reduces the cracking, leading to longer battery life and a higher level of safety.
• An inexpensive biosensor developed by Brazilian engineers can help detect a saliva protein linked to mental illness. Early detection allows doctors to get a jump on treatment, which increases positive outcomes. The device only costs about $2.
• April 7th will mark the second anniversary of International Silver Day, a global observance dedicated to recognizing silver’s impact on civilization. The date was chosen because 47 (April is the 4th month of the year) is silver’s atomic number.  
• SMX has developed a molecular indicator that can be used to track silver from the mine to the consumer. The company develops invisible markers that can be embedded into materials on a molecular level, allowing them to be traced no matter what form they may take later in the supply chain. According to the Silver Institute, the technology “allows silver’s origin to be marked at the early production stage and remain in the company’s blockchain database even if the silver is refined, melted, or undergoes any process and is formed into coins, bars, ingots, jewelry, or any other configuration.” 
• A Japanese team at the Institute of Science, in partnership with other researchers, has fabricated a silver-based atomic switch, which is just one molecule thick. The tiny switch can carry current stably and safely. Researchers say this technology could allow circuits in chips to be built much smaller, using less electricity and producing less heat.