What's Driving Silver Toward $100 in 2026?

Silver’s remarkable ascent—rocketing from below US$30 in early 2025 to surpassing US$60 by December—has sparked intense debate about where the white metal heads next. The consensus among commodity strategists is surprisingly bullish, with forecasts ranging from a conservative US$70 to an ambitious US$100, but the underlying drivers tell an even more compelling story.

The Structural Shortage That Won’t Quit

The market is experiencing what can only be described as a fundamental supply crunch. Metal Focus data indicates 2025 saw a 63.4 million-ounce deficit—and while that’s projected to narrow to 30.5 million ounces in 2026, the shortage will remain a defining feature of the silver landscape.

The core issue is straightforward: silver mine production simply can’t keep pace with demand. About three-quarters of silver comes as a byproduct of copper, gold, lead, and zinc extraction. This means miners have little incentive to boost silver output even as prices hit four-decade highs. The economics don’t work—when silver represents only a small fraction of mining revenues, producers won’t sacrifice other metals to chase it. Adding insult to injury, bringing new silver deposits into production takes a decade or more, making any supply response glacially slow.

Global inventories are tightening dramatically. London Futures Exchange stocks have plummeted, Shanghai exchange reserves hit 2015 lows, and physical bars are becoming scarcer by the week. This isn’t theoretical scarcity; it’s reflected in rising lease rates and borrowing costs that signal genuine delivery challenges.

The Twin Engines Powering Demand

Two distinct demand streams are pushing silver higher simultaneously, and both show no signs of slowing.

The Industrial Renaissance begins with renewable energy. Solar panel manufacturers consume enormous quantities of silver, and as global solar capacity expands, so does this consumption. The US government even added silver to its critical minerals list in 2025, underscoring its strategic importance. But solar is just the beginning—the electric vehicle revolution is accelerating silver’s role in battery systems and contacts, while the AI boom creates an entirely new demand vector through data centers.

The energy picture is particularly striking: US data centers have chosen solar power five times more frequently than nuclear over the past year. Given that data center electricity demand is expected to grow 22 percent over the next decade—and AI-specific power consumption could surge 31 percent—silver will increasingly become the enabling metal for artificial intelligence infrastructure.

The Safe-Haven Stampede adds another layer. With Fed independence under scrutiny, interest rate policy in flux, and geopolitical tensions simmering, investors are rotating into alternative stores of value. Silver, positioned as an affordable proxy for gold, has attracted staggering inflows into precious metals ETFs. Holdings have climbed to roughly 844 million ounces this year—representing 130 million ounces of net inflows and an 18 percent annual jump.

India exemplifies this trend perfectly. As gold prices crossed US$4,300 per ounce, Indian buyers pivoted toward silver jewelry as a more accessible wealth preservation tool. India imports 80 percent of its silver needs, and surging demand there has drained London stocks and tightened global supply even further.

2026 Price Outlook: Conservative to Euphoric

Forecasters are divided, but most lean bullish. The conservative camp, including Citigroup analysts, projects silver will trade in the US$70 range if industrial fundamentals hold. More aggressive strategists see silver pushing toward US$100, particularly if retail investment demand—which many call the true “juggernaut” for prices—continues accelerating.

Downside risks exist: a global economic slowdown, sudden liquidity evaporations, or a reversion from record ETF inflows could trigger rapid reversals. The white metal’s volatility, after all, is legendary. But unless one of these shocks materializes, 2026 appears positioned to build on 2025’s dramatic rally.

The convergence of structural supply scarcity, surging industrial consumption, and safe-haven demand creates a setup that’s historically rare—and potentially historic for silver.