The silver market could shift from a deficit to a surplus in 2027, according to Metals Focus, as rising inventories and weaker demand ease a supply squeeze. As of October 30, 2026, silver had fallen to successive year-to-date lows in the low $50s in recent weeks, underperforming gold.

Key Takeaways

  • Metals Focus expects the silver deficit to narrow in 2026 and turn into a surplus in 2027.
  • London vault inventories reached 932 million troy ounces at the end of September.
  • High prices are weighing on jewellery demand, while manufacturers are reducing silver use in solar panels.

Silver market shifts away from a squeeze

Metals Focus expects the prospective surplus to reduce the likelihood of a repeat of the severe physical supply squeeze that supported prices in 2025 and early 2026. A surplus remains a forecast, not an established outcome.

The Silver Institute’s April survey release described a liquidity squeeze in October 2025 and said global silver demand exceeded supply for a fifth consecutive year. Its earlier 2026 outlook projected a wider deficit that year; the later Metals Focus assessment expects the deficit to narrow.

Inventories rise as investment demand cools

Of the 932 million troy ounces in London vaults at the end of September, about 267 million ounces were available for trading after excluding metal held by physically backed exchange-traded products. The available stock was nearly double its October 2025 low, Metals Focus said.

Holdings in silver exchange-traded products have fallen by about 60 million ounces in 2026, releasing metal previously tied up in investment vehicles. Sales of silver bullion coins by leading mints fell more than 80% quarter on quarter in the second quarter; they recovered somewhat in the third quarter but remained 22% below a year earlier.

Rates and industrial demand shape the outlook

Metals Focus expects silver to continue taking its cue from gold over the next 12 months, with rising interest rates and yields presenting near-term headwinds for precious metals. The recent price decline does not by itself establish what caused it.

The consultancy also said high prices were restraining jewellery and silverware consumption, while efforts to use less silver or substitute other materials in solar panels were curbing industrial demand. It said silver could regain momentum if expectations for aggressive monetary tightening in 2027 eased.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.