Outlook for Silver in 2026: Between Industrial Strength, Physical Scarcity, and Macroeconomic Volatility
Updated:
19 MAY, 2026
Silver faces 2026 as one of the most complex assets within the universe of commodities. After becoming one of the big stars of 2025, with increases of over 140% and historical highs, the metal has started the year with a strong correction that has returned the market's attention to its two main drivers: its role as a monetary asset and its growing industrial relevance.
The recent volatility does not seem to respond to a structural deterioration of the fundamentals, but to a combination of profit-taking, adjustment of expectations about interest rates, strengthening of the dollar and exit of speculative positions. At the same time, physical demand from Asia, the growth of the photovoltaic sector and supply limitations continue to shape a favorable background scenario for the metal in the medium term.
Outlook for silver in 2026
For Taylor Smith, Head of Real Liquid Asset Investment Strategy at DWS and co-portfolio manager of DWS Gold and Precious Metal Equities, silver will continue to be an asset marked by its dual monetary and industrial nature. The expert points out that "silver remains a hybrid asset in 2026, determined both by its monetary characteristics and its role as a key industrial metal".
Smith believes that short-term movements will continue to be conditioned by macroeconomic factors, especially interest rates and the strength of the dollar. In this regard, he recalls that "the price correction at the beginning of the year —similar to that of gold— was mainly driven by macroeconomic factors, the revision of expectations about interest rates, profit-taking and the strengthening of the US dollar". Despite this, he maintains a constructive view for the medium term and highlights that "although short-term price movements are still linked to macroeconomic factors, the medium-term outlook continues to be favorable".
From Jupiter AM, Ned Naylor-Leyland, gold and silver investment manager at Jupiter AM, focuses on the physical market and the growing drain of inventories. As he explains, "in March we saw very solid silver imports into China, and that trend continues". The manager considers the depletion of Asian inventories particularly relevant and warns that "Shanghai's physical inventories [...] are approaching zero". In his opinion, the movement of physical metal from the West to Asia could end up triggering tensions in the market: "It's a very interesting situation because that's where the physical metal is being withdrawn from the system".
For his part, George Cotton, portfolio manager at J. Safra Sarasin Sustainable AM, believes that silver will continue to show much higher volatility than gold. The expert affirms that "2026 confirms that silver is the highest beta asset against gold", a characteristic that explains both the strong rises and the abrupt corrections of the metal. Cotton also believes that the geopolitical and fiscal context could continue to support precious metals, as "the crisis could reinforce the role of precious metals as a hedge against fixed income in an environment of greater geopolitical and fiscal uncertainty". However, he warns that "high real interest rates would mean that both gold and silver could remain within a limited range in the coming months".
From Ofi Invest AM, Benjamin Louvet, Director of Commodity Management at Ofi Invest AM, recalls the extraordinary performance of the metal last year and believes that the structural fundamentals continue to support the asset. The expert highlights that "silver was the best performing commodity in 2025, with a rise of over 140% and reaching historical highs". In his opinion, despite recent volatility, "the fundamentals remain intact: structural supply deficits, resilient physical demand and needs arising from the energy transition support favorable medium-term prospects".
Industrial demand, the great structural pillar
Industrial demand appears as one of the main supports for silver in 2026. Taylor Smith, from DWS, believes that the energy transition will continue to drive the consumption of the metal thanks to its physical properties. As he explains, "structural trends such as electrification, innovation in automotive and, especially, the rapid expansion of the photovoltaic sector, are supporting consumption". The expert also emphasizes that "the high conductivity of silver makes it difficult to replace and makes it an essential component for solar panels".
However, Smith introduces an important nuance related to the price level. From DWS they observe that "at price levels close to 100 dollars per ounce, we observe sensitivity in demand". The manager adds that "photovoltaic producers have indicated an increase in substitution efforts for copper and aluminum, even at the cost of reducing efficiency", which could partially limit the growth of demand if the metal continues to become more expensive.
From Ofi Invest AM, Benjamin Louvet agrees in highlighting the strategic role of silver in the energy transition. The manager states that "industrial demand continues to grow, supported by the unmatched electrical conductivity of silver and its key role in solar energy and electric vehicles". In addition, he recalls that these sectors "now represent around 30% of demand".
Louvet also warns of difficulties on the supply side, which continue to strain the market. As he explains, "mining production remains limited due to the decline in ore grades, the small number of new discoveries, long development times, and stagnation in recycling". This situation is "forcing the market to depend on increasingly reduced inventories after years of deficits".
From Jupiter AM, Ned Naylor-Leyland provides another sign of physical tension in the market. The manager highlights that "metals have also been leaving New York and London, and have ended up in India and China", a movement that reflects the strength of Asian demand and the reduction of available inventories in the main financial centers.
The correction at the beginning of the year: macro, speculation and deleveraging
The strong correction suffered by silver at the beginning of 2026 is interpreted by managers as a technical and macroeconomic adjustment rather than a fundamental deterioration.
Taylor Smith, from DWS, believes that the movement was mainly linked to financial factors. The expert explains that "the price correction at the beginning of the year —similar to that of gold— was mainly driven by macroeconomic factors, the revision of expectations about interest rates, profit-taking, and the strengthening of the US dollar, rather than by a deterioration of the underlying fundamentals".
For Ned Naylor-Leyland, from Jupiter AM, the fall responded mainly to a clearing of speculative positions. He points out that "what we saw with the weakness of the spot price since February was a clearing of speculative positions held by retail investors and trend followers". Even so, he believes that the physical market continues to send signals of strength.
From J. Safra Sarasin Sustainable AM, George Cotton recalls that silver came from a period of strong investor euphoria. The manager highlights that "the strong speculative interest during December and January, a period in which silver greatly outperformed gold and in which activity in the options market increased notably, gave way to a sharp drop of around -30% in a few days".
Cotton also points out that a good part of the deleveraging could have already occurred. In this sense, he states that "positions in silver ETFs fell in the first quarter of 2026 to lows since September 2025" and that "net speculative positions in futures in the U.S. are at their lowest level since January 2024".
Finally, Benjamin Louvet, from Ofi Invest AM, links the correction to the shift in expectations about US monetary policy. He explains that "silver suffered an unprecedented correction on January 30, 2026, after the announcement of Kevin Warsh as the next chairman of the Federal Reserve". The market interpreted this movement "as a signal of a more aggressive US monetary policy", which "triggered a strong profit-taking and forced deleveraging in options, ETFs, and futures". In addition, Louvet adds that "additional pressure came from China through stricter controls on the market".
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