After reaching an interim all-time high of 53.62 US dollars per ounce, the silver price corrected to 50.68 US dollars during the day, representing a significant setback. However, the precious and industrial metal has since recovered and is now trading above 52 USD per ounce. The primary causes of the recent fluctuations—an increase in volatility that many analysts had predicted—are bottlenecks in the physical supply chain and an inconsistent flow between key trading venues.
Market observers report that physical metal is now increasingly flowing back into the London Over-the-Counter (OTC) market. This temporarily eases pressure on the supply side and may explain why profits were quickly realized after the record high. Concurrently, the structural deficit remains: physical supply cannot keep pace with demand, which is supported by both industrial and investment sectors.
Many market participants are reminded of the 1980s, when an attempt to dominate the market drove prices upward before regulatory interventions abruptly ended the rally. However, experts emphasize clear distinctions from the present situation. The current movement in
Industrial Demand Drives Silver – Deficit According to Silver Institute
Industrial use, in particular, remains the most significant driver. Silver is a key material for electrification, photovoltaics, electronics, and numerous energy transition applications. According to the
Against this backdrop, some analysts foresee upside potential for the coming quarters. A recent outlook suggests a rise in the silver price to approximately 56 US dollars per ounce by September 2026. Given the recent market dynamics, “upside risks” are also cited, referring to the possibility that prices could surpass projected trajectories during periods of tight availability and strong demand.
Politics and Trade as Volatility Factors: Tariffs, COMEX, and London
In addition to fundamental data, trade policy and regulatory factors influence short-term price formation. In the USA, the Geological Survey (USGS) has included silver in the draft “Critical Minerals” list for 2025. A final decision is still pending, but the classification debate itself is already increasing attention on the metal. Should silver officially be designated as “critical,” this could further solidify industrial demand while simultaneously fueling discussions about potential trade measures.
Although silver is not currently subject to US tariffs, uncertainty regarding future regulations is already affecting inventory flows. Market participants report increased stockpiles in New York (COMEX) as actors reallocate in anticipation of potential tariffs. A rapid return flow of large quantities to London is considered challenging, not least because attractive margins would be required. In London, the physical market remains tight, according to observers; backwardation and higher leasing rates indicate limited availability.
Outlook: Scenarios for the Silver Market
What risks could temper the outlook for silver? The most significant headwind is considered to be a global economic downturn, which would diminish industrial demand. Currently, however, many economists anticipate a period of moderate growth accompanied by elevated inflation rates. Against this backdrop, and with prospective interest rate cuts by the US Federal Reserve—later in the year and extending into 2026—market observers generally view conditions for silver as supportive. Lower interest rates can reduce the opportunity cost of holding inventory and enhance the attractiveness of real assets relative to interest-bearing investments.
For investors, this environment primarily signifies increased uncertainty and, consequently, pronounced volatility. Prices exceeding 50 US dollars per ounce and a record high of 53.62 US dollars demonstrate the market’s sensitivity to news regarding physical availability, inventory flows between COMEX and London-OTC, and trade policy signals. Concurrently, the reported supply deficit remains a central factor shaping the medium-term discourse.
Conclusion: The silver price currently oscillates between structural scarcity and short-term relief provided by inventory movements. The inclusion of silver in the USGS draft for critical minerals, the role of industrial demand, and the geopolitical landscape shape the overall picture. Whether the projections for the years leading up to 2026 will materialize largely depends on the evolution of the real economy, monetary policy frameworks, and potential trade regulations.
