Current context

Silver has enjoyed an unprecedented year, rising around 150 per cent or more in 2025 and hitting record nominal levels above about US$75 per ounce. This rally has been driven by a combination of weak real interest rates, geopolitical uncertainty, structural deficits, industrial demand and speculative flows. 

1. Could physical shortages render traditional valuation models ineffective?

Yes, traditional quantitative models that rely on historical price behaviour or purely statistical patterns can lose explanatory power during structural dislocations. For example:

• Societe Generale’s bubble-identification model signals a “bubble” on technical grounds (rapid, super-exponential growth with oscillations), but its own analysts highlight that structural shifts like de-dollarisation, policy changes and supply restrictions cannot be captured fully by these models. 

• Physical tightness in inventories, particularly in key centres such as China and London, has led to premiums on physical silver and very low visible stocks. That raises the possibility of delivery squeezes or backwardation scenarios that classic price models do not handle well. 

Thus, if physical supply remains highly constrained while industrial and investment demand rises, traditional price-only models may misprice risk and momentum.

2. Is the super bull run of precious metals done?

The outlook for precious metals is mixed and highly contingent on macro and fundamental conditions:

• Many forecasts suggest that volatility will persist, and some strategists argue the market is not necessarily in a structural “bubble” but rather experiencing an extraordinary and volatile rally. 

• Analysts see a wide range of possible 2026 outcomes, from significant pullbacks to further gains. Some forecasts put possible silver price levels anywhere from around US$45 up to US$90, depending on inventory dynamics, interest-rate paths, dollar trends and speculative positioning. 

• In this context, the rally is not necessarily over, but it cannot be assumed to continue unchecked. In markets with large speculative positioning and shifting fundamentals, sharp corrections and range-bound periods are common.

3. Could silver hit US$100 in 2026?

The possibility exists but it is not a consensus view:

• Some technical and retail sentiment analysts argue that, given current momentum and structural demand (solar, EVs, AI, industrial uses), silver could test psychological levels like US$100 in 2026. 

• However, major institutional forecasts by banks and commodity strategists typically cluster in more modest ranges (often US$45–US$90) rather than taking US$100 as a base case. 

• Reaching US$100 would likely require a powerful convergence of bullish factors: sharply dovish central-bank policy, continued structural deficits, weakening of the US dollar, minimal inventory rebuilding and sustained investor demand. Absent those conditions, topside technical targets can be tested but are not assured.

Key risks to be aware of

• Margin changes and liquidity shifts. Exchanges increasing margin requirements can amplify volatility and contribute to sharp price moves. 

• Corrections. After large moves, the risk of pullbacks or extended consolidation is elevated, especially if speculative positioning unwinds. 

• Dollar strength or rising real yields could reduce the appeal of non-yielding assets like silver.

Practical takeaway

Silver’s performance this year has been extraordinary and driven by both fundamentals and sentiment. Traditional valuation models may understate risks when structural supply-demand imbalances and monetary backdrops shift. A continued bull run is possible, but expecting a smooth path to any specific target, including US$100, is unrealistic without clear catalysts. A disciplined approach to risk, scenario planning and careful attention to macro indicators is essential when dealing with highly volatile commodities.