THE silver market could see another sharp price squeeze, with six consecutive years of supply deficits and depleted stockpiles leaving the market vulnerable to sudden moves, said the Financial Times citing the World Silver Survey.
Published by consultancy Metals Focus and the Silver Institute, the report forecasts a sixth straight annual deficit in 2026 of around 46 million ounces, with total demand continuing to outpace supply, said the newspaper.
“The conditions are certainly there for another squeeze,” said Philip Newman, MD of Metals Focus. “I don’t think it is necessarily all behind us.”
Silver hit a record $121 per ounce in January, having surged through successive highs in late 2024 and early 2025. A previous squeeze in October was triggered by strong Indian festive-season demand, which combined with low London vault inventories and heavy exchange-traded fund buying to push prices above $50 an ounce.
Last year global silver demand fell 2% as elevated prices curbed industrial and jewellery consumption. Solar panel demand dropped 6% as manufacturers substituted other metals, more than offsetting a 14% rise in bar and coin purchases and a tripling of net ETF investment, said the Financial Times. Supply rose 7% through higher mining and recycling output, though not enough to close the deficit.
Solar demand is forecast to fall a further 19% this year and jewellery demand by 16%. The report cautioned that silver risked becoming “the victim of its own success” through price-induced demand destruction.
Unlike gold, silver has no central bank backstop, making it more susceptible to liquidity squeezes and sharp price swings.
