Silver Market Deficit Expected for Sixth Consecutive Year Despite Price Volatility
The silver market has been on a wild ride in 2026, with prices fluctuating wildly. However, according to Michael DiRienzo, President and CEO of The Silver Institute, investors should not be fooled by the volatility, the underlying silver market remains remarkably strong.
DiRienzo points out that silver's price has increased substantially over the past two years, reaching $121 an ounce in January 2026 before falling to around $65 per ounce. Despite this volatility, DiRienzo believes that the market has established higher floors due to silver's increasing value as both an industrial metal and a investment potential.
One of the key drivers of silver's strength is its growing demand from industries such as solar energy. The Silver Institute expects a small decline in industrial demand this year, but DiRienzo notes that solar manufacturers are struggling to reduce their silver consumption due to the metal's high electrical conductivity and reliability.
Artificial intelligence (AI) could become another major driver of silver demand, with data centers requiring large amounts of physical infrastructure that use silver. While the exact amount of silver consumed by AI infrastructure is difficult to quantify, DiRienzo expects demand from this sector to increase as data-center installations expand worldwide.