What's Driving Silver Beyond US$60: A 2026 Outlook

Silver just pulled off something remarkable in 2025—climbing from under US$30 in January to over US$60 by December, marking its strongest performance in over four decades. This isn’t random price movement; it’s the result of three converging forces that experts believe will reshape silver demand through 2030 and beyond.

The Supply Crunch That Won’t Go Away

The tightness in silver markets is real. Metal Focus expects a 63.4 million ounce supply deficit in 2025, with the shortfall narrowing to 30.5 million ounces in 2026—but that’s still a deficit. The structural issue runs deeper than temporary supply hiccups.

Here’s the problem: approximately 75 percent of silver is a byproduct of mining other metals like gold, copper, lead and zinc. When miners extract these primary commodities, silver comes along for the ride. Higher silver prices alone don’t motivate miners to ramp up production because silver often represents a small fraction of their revenue stream. Even worse, some miners might shift to processing lower-grade materials that yield less silver per ton.

The exploration timeline compounds this challenge. Taking a silver deposit from discovery to production takes 10 to 15 years. By the time new supply hits the market, demand conditions could have shifted dramatically. Global silver mine production has declined over the past decade, particularly in Central and South America—regions critical to global supply. With aboveground inventories depleting, the market faces a persistent structural deficit that could persist well into the 2030s.

Industrial Demand: The Real Game-Changer

While supply tightens, industrial demand keeps accelerating. The cleantech sector—especially solar panels and electric vehicles—is consuming silver at unprecedented rates. The US government officially classified silver as a critical mineral in 2025, reflecting its importance to national economic interests.

Data centers present an often-overlooked demand vector. Approximately 80 percent of US data centers are concentrated domestically, and their electricity demand is projected to grow 22 percent over the next decade. When you layer in AI infrastructure expansion (expected to grow 31 percent in the same period), the power requirements become staggering. Most significant: US data centers chose solar energy over nuclear five times more frequently over the past year, directly translating to more silver demand for photovoltaic systems.

Renewable energy installations globally continue accelerating. The Silver Institute projects sustained heavy demand through 2030 from the cleantech and AI infrastructure buildout. For India—the world’s largest silver consumer—this translates to rising demand for both industrial applications and jewelry as an affordable wealth-storage alternative to gold, which now trades over US$4,300 per ounce.

Safe-Haven Flows: When Investors Get Nervous

Silver’s role as a portfolio hedge is intensifying. Lower interest rates, potential quantitative easing, US dollar weakness, rising inflation, and geopolitical tensions all support precious metals. But silver offers something gold doesn’t: affordability. Retail investors and institutions are flocking to silver-backed ETFs at record pace.

ETF inflows reached approximately 130 million ounces in 2025, bringing total holdings to roughly 844 million ounces—an 18 percent increase year-over-year. This money flow is real and measurable. The consequences are visible in physical markets: silver bar and coin shortages at major mints, declining inventories at futures exchanges in London, New York and Shanghai, and record-low silver stocks at the Shanghai Futures Exchange (lowest since 2015).

Rising lease rates and borrowing costs signal genuine scarcity rather than speculative positioning. In India, where gold traditionally served as wealth preservation, silver jewelry demand is accelerating as buyers seek a more accessible store of value. The nation imports 80 percent of its silver supply, and current buying has substantially drained London stock reserves.

What 2026 Looks Like: Price Targets Vary Widely

Forecasters remain cautious about precise price targets, given silver’s notorious volatility. However, the fundamental case for higher prices appears robust.

Conservative estimates place silver in the US$50-US$70 range for 2026. Citigroup predicts silver will outperform gold and reach upwards of US$70, particularly if industrial fundamentals hold firm. More bullish analysts like Frank Holmes see silver approaching US$100, with some forecasters citing US$100 as a realistic 2026 target based on structural supply constraints and sustained demand from cleantech and AI sectors.

The key downside risks include global economic slowdown, sudden liquidity corrections, or sentiment shifts around large unhedged short positions. If confidence in paper silver contracts weakens, pricing dynamics could realign quickly across trading hubs.

For investors monitoring silver through 2026 and into 2030, the critical variables are industrial demand trends, Indian import flows, ETF positioning, and price divergence between major trading centers. Silver’s “fast horse” reputation in the precious metals space stems from its combination of industrial necessity, investment appeal, and structural scarcity—a trio unlikely to disappear in the coming years.