The silver market is entering 2026 with unusually thin inventories – and Goldman Sachs believes this could further exacerbate price dynamics. In a recent report, the analysts point out that low available inventories in the relevant London vaults make the market particularly susceptible to capital flows. As a result, upward movements can escalate more quickly – and end just as abruptly when bottlenecks ease. According to market data, silver is currently trading above $84 per ounce!
The diagnosis is noteworthy: Goldman Sachs does not speak of a global shortage of silver, but of regional distortions and logistical bottlenecks. These distortions are enough to put a market, which is traditionally more volatile than gold anyway, into a phase of increased fluctuations. For investors and industrial buyers, this means one thing above all: price movements in 2026 could be determined more by “flows” than by classic fundamentals.
Silver: Why Thin London Inventories Dominate the Market
According to Goldman Sachs, the central mechanism is relatively simple, but effective: if the available silver inventories in London are low, additional demand must be offset more quickly via the price. Under “normal” conditions, a weekly net demand surge of 1,000 tons would move the silver price by around 2%, according to the bank’s estimate. In the current situation, this sensitivity is therefore around 7% – a benchmark that shows how strongly the market now reacts to inflows and outflows.
This increased responsiveness is closely linked to London’s role. The global reference price for physical silver is set there, and a significant portion of the liquidity is located there. If inventories become scarce, so-called squeezes can arise: price rallies accelerate because new purchases absorb the remaining inventories. If the bottleneck turns, the movement can run back all the more sharply. Goldman sees exactly this “asymmetry” as shaping the next few months – both upwards and downwards.
From New York to London – or Does the Silver Stay in the USA?
The background to the tense situation dates back to the previous year. According to the analysts’ assessment, a significant portion of the metal was relocated to US warehouses in 2025 because market participants feared a possible tariff or trade policy of the Trump administration. As a result, inventories in US vaults rose, while availability in London decreased noticeably. This regional redistribution can distort price formation, even though there may be sufficient silver available from a global perspective.
Whether this situation normalizes again depends largely on trade policy, according to Goldman Sachs. If clarity is created and silver migrates from US vaults back to London, this could ease the physical tightness – and thus also dampen the price fluctuations. However, the analysts point to an important parallel: even with gold, a large part of the inventories previously relocated to New York in COMEX vaults remained there, even after Washington had exempted gold from tariffs. If silver behaves similarly, the extreme price reaction could continue even if there is a definitive statement on possible US tariffs on silver.
At the same time, Goldman Sachs emphasizes that demand does not necessarily have to be “overstretched,” although silver is trading at record levels. As an indicator, the analysts state that inventories in silver ETFs are still below their highs from 2021. Against this background, it is conceivable that ETF inflows will increase again – for example, with further interest rate cuts or broader portfolio diversification.
China Tightens Rules – Fragmentation as a New Volatility Factor
An additional disruptive factor comes from Asia: China has introduced new export restrictions for 2026, which require official approval for silver exports. Goldman Sachs sees this less as a direct shortage on a global scale, but as the risk of fragmentation: if material can no longer flow freely between regions, liquidity decreases and local bottlenecks have a greater impact on the price.
The analysts outline a structural change: instead of a “pooled” global system in which inventories act as buffers across regions, market participants could increasingly build up their own safety stocks. From the perspective of price formation, this would be a shift towards isolated regional inventories. Consequence: fewer compensation options, more erratic movements, higher premiums in tense centers and a stronger decoupling between physical markets.
Ultimately, Goldman Sachs paints a picture of a silver market in 2026 that is less characterized by the question of “Is there enough silver?” but by “Where is it – and how quickly can it get to where it is needed?”. In an environment with tight London inventories, tariff policy uncertainty and additional restrictions in world trade, silver remains particularly susceptible to rapid changes in direction – even if the global supply situation itself does not have to be considered permanently critical.
