Silver set to shift to surplus with prices stabilizing in 2027
Silver is poised to shift from a prolonged supply deficit to a potential surplus by 2027, driven by a decline in industrial and solar demand. Major brokerages now expect prices to consolidate rather than rebound to recent record highs, with forecasts ranging from $65 to $95 per ounce.
The anticipated surplus follows a volatile period where international silver prices surged from $30 an ounce in early 2025 to an all-time high of $121 in January 2026. By June, prices had corrected by nearly 65% to $57 an ounce and are currently trading between $60 and $61 an ounce. The Indian market mirrored this trend, with silver rising from ₹100,000 per kilogram in January 2025 to ₹420,000 by the end of January 2026, before dropping to ₹194,000 in June and stabilizing near ₹225,000 per kilogram.
The fundamental supply-demand balance is rapidly changing. The global silver deficit, which peaked at 237 million ounces in 2022, has narrowed significantly, with a surplus expected by 2027. This shift is largely due to a nearly 30% decline in solar demand in China and reduced industrial fabrication as manufacturers adopt cost-saving measures, such as using thinner silver contacts and plating copper instead of pure silver.
Supply is also increasing, with mine output expanding and the London Metal Exchange (LME) holding a record 914 million ounces of silver inventory. While physical investment is projected to grow by 18%, there is anticipation of potential fund liquidation following strong exchange-traded fund buying in recent years. Major brokerages, including UBS, Commerzbank, JPMorgan, Citi, Deutsche Bank, and HSBC, forecast a lower consolidation range for silver prices in 2027.