Silver's 2026 Forecast: Why Market Consensus Is Shifting Toward $70 as the New Support Level

Breaking Free From Gold’s Gravitational Pull

For decades, silver has traded in gold’s shadow, its price movements largely derivative of broader precious-metal sentiment. That dynamic is fundamentally changing. As silver pushed past US$66 per ounce in late 2025, observers are recognizing a transition rooted not in speculation but in tangible market shifts: persistent inventory declines, relentless industrial consumption, and an expanding role in critical infrastructure spanning AI, electric vehicles, and renewable energy systems.

Gold primarily functions as a wealth store, retaining value through economic cycles. Silver operates differently. Its physical properties—exceptional electrical conductivity and thermal management capabilities—make it irreplaceable in advanced hardware applications. This distinction matters. Price-insensitive industrial buyers now absorb significant volumes regardless of short-term cost fluctuations. Combined with stubbornly low above-ground stock levels, silver’s price trajectory is decoupling from gold’s traditional patterns.

By 2026, market participants expect US$70 per ounce to function as a price floor rather than a ceiling. This represents a significant recalibration in how the market values the metal.

The Artificial Intelligence Infrastructure Demand Story

One of the most underappreciated demand drivers for silver originates from the explosive growth of AI-focused data infrastructure. As technology companies scale hyperscale data centres to support large language models and generative AI systems, hardware requirements have transformed.

Advanced servers and accelerator systems designed for AI workloads consume substantially more silver than conventional data-centre equipment. The metal appears throughout high-performance systems: in printed circuit boards, connectors, busbars, thermal interface materials, and power distribution systems. Industry research suggests AI-optimized hardware consumes two to three times the silver content of traditional server infrastructure.

The demand elasticity here is crucial. For corporations investing billions in data-centre expansion, silver’s material cost represents a negligible percentage of total project expenditure. A doubling or tripling in silver prices creates minimal pressure to reduce consumption. Processing speed, thermal management, and system reliability take priority over commodity pricing. This price-insensitive consumption pattern, operating within an already tight supply environment, creates persistent upward pressure.

Global data-centre electricity demand is projected to roughly double by 2026. This expansion directly translates into millions of additional ounces of silver locked into hardware that rarely enters recycling streams, permanently removing the metal from available supply circulation.

The Supply Deficit Pattern: Now in Its Fifth Year

Silver market fundamentals are characterized by a structural imbalance that has persisted across multiple years. The global market is entering its fifth consecutive year of annual supply deficit—a rarely sustained condition in commodity markets.

Cumulative shortfalls since 2021 approach 820 million ounces of silver. To contextualize this figure: annual global mine production generates roughly 800-900 million ounces. The cumulative deficit essentially equals an entire year of worldwide production, representing a significant structural drain on available inventory.

The 2025 deficit, while smaller than the severe shortfalls recorded in 2022 and 2024, remains economically significant. Above-ground stock levels continue their gradual decline, creating genuine physical tightness in the market.

Why can’t supply respond? The answer reveals market rigidity. Approximately 70-80% of silver production emerges as a byproduct of base-metal mining—copper, lead, zinc, and gold extraction. Silver supply cannot independently scale even when prices rise substantially. Production increases require corresponding growth in base-metal output, which operates on entirely different market dynamics and long-term planning cycles.

Developing new primary silver mines requires a decade or longer from initial feasibility study through first production. This multi-year development timeline means supply response to price signals remains fundamentally inelastic. The market cannot quickly adjust output to balance demand.

The evidence appears in exchange inventory data. Registered silver stocks have contracted to levels not seen in years. Physical tightness manifests in elevated lease rates and periodic delivery delays, indicating genuine scarcity at current trading levels.

The Gold-to-Silver Ratio: A Comparative Valuation Signal

Historical analysis of precious-metal cycles reveals a useful pattern: the gold-to-silver price ratio provides insight into relative value assumptions between the two metals.

As of December 2025, with gold trading near US$4,340 per ounce and silver approximately US$66 per ounce, the ratio stands at roughly 65:1. This represents meaningful compression from ratios exceeding 100:1 that prevailed earlier in the decade. The modern average range for this metric spans 80-90:1.

During established precious-metal bull markets, silver typically outperforms gold as investors seek greater volatility and leverage. This pattern re-emerged forcefully in 2025, with silver’s percentage gains substantially exceeding gold’s performance.

The mathematical implication merits attention: if gold remains anchored near current levels through 2026, a further ratio compression toward 60:1 would mathematically require silver prices above US$70. More aggressive compression scenarios—while not consensus forecasts—could drive significantly higher prices.

Historical cycle analysis demonstrates that silver frequently overshoots technical “fair value” estimates during periods when supply constraints tighten and momentum accumulates. Current conditions align with these patterns.

Why US$70 Functions as a Floor, Not a Ceiling

The relevant question for 2026 becomes not whether silver can reach US$70, but whether it can sustain that level.

From a structural analysis perspective, the evidence increasingly supports sustained elevation. Industrial demand remains sticky and price-insensitive. Supply cannot quickly expand despite price incentives. Above-ground inventories offer minimal buffering capacity. Once a price level becomes the equilibrium point where physical buyers clear their requirements, that price attracts additional demand on weakness rather than encouraging liquidation on strength.

Silver’s market function is simultaneously shifting. The metal is transitioning from being primarily a financial hedge or momentum vehicle into a core industrial commodity with embedded financial characteristics. This represents a meaningful revaluation of its market role.

For market participants, this transition carries practical implications. Access to efficient trading mechanisms and appropriate risk-management tools becomes increasingly valuable. Investors seeking to participate in silver’s structural repricing while managing capital efficiency and volatility require flexible instruments that permit both directional positioning and protective hedging without forcing all-or-nothing allocation decisions.

Participation Strategies in a Restructured Market

Active market participants increasingly recognize that direct physical ownership represents only one approach to silver exposure. Alternative instruments—including futures contracts, options strategies, and leveraged products—enable participation in structural trends while maintaining disciplined capital allocation and risk controls.

The advantage becomes apparent in volatile markets. Rather than committing full capital and enduring complete price exposure, investors can express directional convictions while maintaining the flexibility to adjust positions as new information emerges or market conditions shift. This capacity for responsive portfolio management matters increasingly as volatility persists.

Effective strategy design requires platforms offering transparent pricing, minimal trading friction, and comprehensive risk-management tools. Demo environments for strategy testing before capital commitment add genuine value, particularly for less-experienced traders approaching a market with new fundamental dynamics.

Conclusion: A Market Repricing Still in Progress

Silver’s ascent reflects deeper structural transitions than simple inflation hedging or speculative momentum. The metal is undergoing a fundamental revaluation of its market role, driven by genuine supply constraints, price-insensitive industrial demand, and expanding applications in critical infrastructure.

With AI infrastructure expanding aggressively, above-ground inventories depleting, and production unable to respond flexibly to price signals, the market is adjusting toward a higher equilibrium price level. In this context, US$70 per ounce represents a likely floor rather than a speculative ceiling for 2026.

The substantive question facing investors no longer concerns whether silver has already advanced excessively. Instead, the relevant inquiry examines whether the market has fully incorporated silver’s evolving role within the global economy and infrastructure. Current market evidence suggests this repricing process remains incomplete, offering potential participation opportunities for investors positioned appropriately for continued structural changes.