• Industrial, jewelry and silverware demand expected to decline in 2026.

• Physical investment demand projected to rise 20% to 227 million ounces.

• Tight supply expected to support high prices, with banks forecasting gains.

Traditional drivers of silver demand are expected to contract in 2026, with the exception of physical investment, according to the Silver Institute. Rising demand in that segment is set to contribute to a sixth consecutive annual market deficit, as strong safe-haven interest continues to push prices higher.

In its 2026 silver market outlook published earlier this week, the Silver Institute noted that silver posted its strongest annual performance in 2025 since 1979. The momentum has carried into the start of this year, with prices breaking above $100 per ounce in January and currently trading around $80 per ounce. Like gold, silver is increasingly used by investors seeking protection against financial market volatility and global economic uncertainty.

“After three consecutive years of decline, Western physical investment is expected to recover in 2026, as silver’s exceptional price performance and ongoing macroeconomic uncertainty rekindle investor interest. Investment demand in India is also likely to build on last year’s substantial gains amid positive investor sentiment.,” the institute said.

High prices are being underpinned by constrained supply. Although global supply is expected to rise 1.5% in 2026, it is projected to reach 1.05 billion ounces — insufficient to fully meet demand, which is forecast to remain broadly stable compared with 2025.

The Silver Institute expects industrial demand to fall 2%, jewelry demand 9%, and silverware demand 17%. By contrast, physical investment demand is projected to increase 20% to 227 million ounces, the highest level in three years.

This supply-demand imbalance is expected to provide direct support to prices. Major banks foresee sustained elevated price levels in 2026. J.P. Morgan forecasts an average silver price of around $81 per ounce this year, more than double the estimated 2025 average, citing continued investor interest as a key driver. Citi has taken a more aggressive short-term view, raising its three-month price target in January to $150 per ounce, up from $100 previously.

Emiliano Tossou