Quick overview

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The Silver Institute predicts that despite strong demand for coins and bars and dwindling supply, the global silver market will be in deficit for a sixth year in a row. According to the industry group’s annual outlook, which was released on Wednesday, the 2026 deficit is expected to increase by 15% to 46.3 million troy ounces.

The report states that although the estimated demand for silver bars and coins has increased by 18%, overall consumption is likely to decline by 2% because of decreases in industrial applications, photography, jewelry, and silverware.

According to the institute, a minor decline in mining output and a decrease in producer hedging activity are the main causes of the projected 2% decrease in total supply this year. Recycling will increase by 7%, lessening those losses.

The industry group stated in the report that “we remain constructive towards silver for the rest of 2026,” despite the Iran war having clouded the short-term price outlook. The institute anticipates that the Middle East conflict will be contained and that monetary tightening to curb inflation driven by energy will only be temporary.

Even if the Iran war continues, investors’ worries about slower economic growth and the strain on the government’s finances will cause inflation-adjusted bond yields to decline, increasing the value of interest-free precious metals like gold and silver. The group wrote, “This should rekindle interest in both gold and silver, coupled with a resurgence of safe-haven demand as pro-cyclical markets contend with liquidations.”