Key Takeaways:
HSBC Securities raised its average silver price forecast for 2026 to $75 an ounce, but expects prices to fall to $70 by year-end as high prices curb demand.
Industrial and jewelry demand is projected to fall by a combined 47 million ounces in 2026 as consumers and manufacturers react to high prices.
Silver Supply & Demand Balance (Forecast)
Silver prices are poised for a pullback to $70 an ounce by the end of 2026, according to an HSBC Securities report that forecasts the global supply deficit will shrink by nearly half.
"Moderating deficits are insufficient to propel prices higher," James Steel, HSBC’s chief precious metals analyst, said in the note. While HSBC raised its average silver price forecast for 2026 to $75 an ounce from $68.25, the bank’s outlook points to a market rebalancing after a volatile year that saw prices touch a nominal high of $121 an ounce in January before falling to $64.
The bank’s supply model, which incorporates data from the Silver Institute, shows the global deficit contracting from 143 million ounces in 2025 to just 73 million in 2026, a 49% decrease. The deficit is expected to narrow further to 25 million ounces in 2027. This compares to a 67 million ounce deficit forecast for 2026 from The Silver Institute, showing a more aggressive rebalancing view from HSBC.
Driving the change is significant demand destruction in price-sensitive sectors. Industrial demand, which accounts for over half of silver consumption, is forecast to fall to 642 million ounces in 2026. The photovoltaic sector is a key source of the decline, with silver costs now making up nearly 30% of a solar cell's production cost, up from just 3-5% in 2021. Jewelry demand is also expected to drop to 157 million ounces. On the supply side, mine production is forecast to be largely flat, but recycled supply is projected to jump nearly 10% to 216 million ounces as holders cash in on higher prices.
This article is for informational purposes only and does not constitute investment advice.
