Metals Focus, the firm behind the World Silver Survey, now expects a surplus of silver in 2027, yet it still forecasts a higher average price for next year compared to this year. The key factor driving this outlook is investor demand, particularly from funds that hold physical silver, rather than a supply shortage. The surplus is primarily attributed to efficiency gains in solar panel manufacturing, which have reduced the amount of silver used per panel, outweighing the growth in solar installations.
Despite the surplus forecast, Metals Focus remains bullish on silver prices, predicting an average of $84.40 per ounce in 2027, up from $72.60 this year. This optimism is based on the expectation of large inflows into physical silver-backed funds. However, the firm also cautions that silver is likely to underperform gold in the near term due to higher interest rates and bond yields.
On Wednesday, silver prices surged to $52.49 an ounce, a 4.58% increase, as the dollar weakened following the US midterm elections. Gold was trading at $4,053.68, resulting in a gold-silver ratio of 77.2. The next interim review by Metals Focus and the Silver Institute, expected in mid-November, will provide further clarity on these forecasts.
The current outlook is based on an interview with Matthew Piggott, Director of Gold and Silver at Metals Focus, rather than a published revision. The official figures from the World Silver Survey, published in April, still show a shortfall of 46.3 million ounces for 2026. The interview suggested a smaller shortfall of 35.4 million ounces for this year and a surplus of 37.3 million ounces for 2027.