The price of silver is facing a critical test as traders debate whether the market is entering a phase of peak scarcity or a structural squeeze. After a dramatic rally in 2025, where the metal surged 147% and briefly hit $120 an ounce, silver has since retreated, now trading around $55.6. The iShares Silver Trust (NYSE:SLV) is down more than 23% year-to-date, with key support at $54.5 just below current levels.
Supporters of higher silver prices point to a sixth consecutive annual deficit, with the World Silver Survey 2026 predicting a widening deficit from 40.3 million ounces in 2025 to 46.3 million. Supply constraints are expected to persist, as mine output remains flat and total supply slips about 2%. Additionally, delegates at the LBMA’s annual conference forecast silver reaching $97 within 12 months, supported by strong physical demand in China.
Conversely, Deutsche Bank argues that peak silver scarcity is already behind us. Daniel Ghali, the bank’s head of metals research, highlights a 17% reduction in silver use per solar cell due to higher prices, leading to a forecasted 20% drop in global solar demand. London vaults hold about 914 million ounces, with freely available metal increasing by 70% over the past year. Deutsche Bank predicts a surplus by 2027, with prices averaging $70 by Q2 2027.
Weaker demand signals, such as Indian imports running 25% below year-ago levels, further challenge the bullish narrative. As the market weighs these opposing views, silver’s next move remains highly anticipated.