A research unit under Fitch Ratings, BMI, has projected that the average price of silver will reach approximately $93 per ounce in 2026. This forecast is primarily attributed to robust investment demand effectively counterbalancing weakened consumption in the solar panel and jewelry sectors due to high prices. Recent market data indicates that the current spot price of silver has stabilized around $88 per ounce, representing a significant increase from the 2025 average of about $40, highlighting the overall bullish sentiment in the precious metals market. BMI's expectation is substantially higher than the market's general consensus of around $80 per ounce for 2026, reflecting the institution's dual optimism regarding persistent supply shortages and strong investor interest.
Further analysis reveals that the core reason for this upward revision in the forecast is the global silver market facing a structural deficit for the sixth consecutive year. Observations from the futures market indicate that although recent physical tightness has eased somewhat, continuous inflows of investment funds into ETFs and physical silver bars are sustaining price resilience. Solar panels, representing one of silver's largest industrial applications, have seen some project procurement delayed due to high prices; jewelry demand has also been impacted by a slowdown in high-end consumption. However, the strength of investment demand is compensating for these shortfalls. BMI explicitly stated: "Although the recent physical tightness in the silver market has eased, we believe that the broader precious metals bull market will continue to provide temporary support for silver prices, even as the current Middle East conflict poses a downside risk to industrial demand." This statement aligns with the recent escalation of tensions in the Middle East, where conflicts could disrupt supply chains but are unlikely to alter the overall bullish structure.
From a medium to long-term perspective, sustained high silver prices will profoundly impact downstream industries. Rising costs for the solar and electronics sectors could slow the pace of the green transition, while major consumer markets, such as China, may seek alternative materials in their industrial recovery efforts amidst high-price conditions. Historical data shows that during similar precious metals bull cycles, silver often maintains high price levels with significant volatility, driven by investment, even if industrial demand faces short-term pressure. Although the current Middle East conflict presents a downside risk to industrial demand, global monetary easing and geopolitical uncertainties continue to bolster safe-haven buying. If the supply deficit continues to widen, prices could easily breach the $100 per ounce mark; conversely, if conflicts ease or an economic soft landing accelerates, the risk of a price correction exists. Market participants need to closely monitor inventory reports, changes in ETF holdings, and Federal Reserve policy dynamics, as these factors will directly determine the price trajectory for 2026.
Overall, this BMI forecast reflects the dynamic balance in the silver market between tight supply conditions and strong investment appetite. Asian importers and investors need to plan ahead to navigate potential price volatility.
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