PRECIOUS METALS | Global Silver Market Faces Sixth Consecutive Year of Supply Shortage

The World Silver Association released its annual outlook on Wednesday, maintaining its previous stance that the global silver market will experience a supply shortage for the sixth consecutive year. According to Odaily, the report forecasts a 15% increase in the supply gap by 2026, reaching 46.3 million troy ounces. Despite an 18% rise in demand for silver bars and coins, consumption in industrial, photography, jewelry, and silverware sectors is expected to decline by 2%. Supply is projected to decrease by 2%, primarily due to a slight drop in mining output and reduced hedging, although a 7% increase in recycling will partially offset this. The report indicates that while the Iran conflict casts a shadow over short-term price prospects, the outlook for silver for the remainder of 2026 remains "constructive." The association anticipates that the Middle East conflict will be controlled, and the tightening of monetary policy to curb energy inflation will be temporary. Even if the conflict persists, concerns over weak growth and fiscal constraints may lower real bond yields, thereby boosting interest in silver, gold, and other non-yielding precious metals. The report states, "The resurgence of safe-haven demand amid cyclical market liquidation should rekindle interest in gold and silver."