Silver Price Forecast 2026: Why $70 Per Ounce Is Becoming the New Support Level

The Structural Case for Higher Silver Prices

Silver’s trajectory through 2025 tells a story of fundamental market rebalancing rather than speculative fervor. With prices surging past US$66/oz by late 2025, the rally reflects profound shifts in supply dynamics, industrial demand patterns, and the metal’s expanding role across emerging technologies. Unlike gold, which functions primarily as a store of value, silver is increasingly embedded in the physical infrastructure of modern economies—from renewable energy systems to semiconductor manufacturing. This functional divergence means silver and gold are following increasingly separate price paths. Looking into 2026, consensus among market participants suggests US$70/oz will operate more as a baseline than as a resistance level, signaling a structural repricing of the metal.

Supply Constraints Create an Inelastic Market

The foundation of silver’s bull case rests on an unusual and persistent supply-demand imbalance. The global market is on track to record its fifth consecutive year of supply deficit—a rare occurrence in commodity markets. Cumulative deficits since 2021 now approach 820 million ounces, equivalent to a full year of global mine production.

The core issue is structural inflexibility. Approximately 70–80% of silver supply emerges as a byproduct from copper, lead, zinc, and gold mining operations. This means the industry cannot rapidly scale silver output in response to price signals. Even when silver prices climb sharply, production remains constrained unless base-metal mining also expands. New primary silver mines require a decade or longer to develop, making the supply curve remarkably price-inelastic.

This rigidity is already visible in market microstructure. Exchange-registered inventories have fallen to multi-year lows, reflected in elevated lease rates and sporadic physical delivery stress. When physical availability tightens, even modest shifts in investment or industrial demand can drive disproportionate price movements.

Artificial Intelligence Infrastructure: The Underappreciated Demand Driver

Among the least discussed but fastest-growing sources of silver demand is artificial intelligence infrastructure. Hyperscale data centres supporting advanced AI models consume silver at rates significantly above traditional computing facilities. The metal’s superior electrical and thermal conductivity makes it irreplaceable in high-performance hardware—servers, accelerators, power systems, printed circuit boards, connectors, and thermal interfaces.

Industry analysis suggests AI-focused data centre equipment absorbs two to three times more silver per unit than conventional infrastructure. With global data-centre power demand expected to roughly double by 2026, this translates into millions of additional ounces flowing into hardware that rarely enters recycling streams. Critically, this demand exhibits price insensitivity. For hyperscale operators, silver costs represent a fraction of a percent of total capital expenditure. Processing delays, thermal inefficiency, or system instability carry far greater economic consequences than metal price fluctuations. This means higher silver prices exert minimal dampening effect on consumption—only reinforcing upward pressure in an already constrained market.

Clean energy and electric vehicle applications amplify this dynamic. Silver’s conductivity requirements in solar panels, power conversion systems, and EV battery terminals create similarly price-insensitive demand streams.

The Gold-Silver Ratio Suggests Further Repricing

The gold-to-silver ratio offers another analytical lens. As of December 2025, with gold trading near US$4,340 and silver around US$66, the ratio stands at approximately 65:1—a sharp compression from 100:1+ earlier in the decade and below the historical modern range of 80–90:1.

During precious-metals bull cycles, silver typically outperforms gold as investors pursue higher-beta exposure. This pattern has reasserted itself in 2025, with silver gains materially exceeding gold’s appreciation. If gold merely stabilizes near current levels into 2026, further ratio compression toward 60:1 would mathematically imply silver prices exceeding US$70. While more aggressive compression cannot be ruled out, it remains outside the base case.

Historical precedent indicates silver frequently overshoots “fair value” during periods of supply tightness and strong momentum, suggesting additional upside cannot be dismissed.

$70: Floor, Not Ceiling

The substantive question for 2026 centers not on whether silver reaches US$70, but whether it sustains that level. From a structural lens, the answer increasingly appears affirmative. Industrial demand remains sticky regardless of price, supply constraints are binding, and above-ground inventory buffers offer minimal relief. Once a price level clears persistent physical demand, that level typically attracts buyers on weakness rather than sellers on strength.

Silver is transitioning from a secondary store of value into a core industrial commodity with embedded financial characteristics. This reallocation suggests US$70 functions as a floor under which buyers become more aggressive, rather than a ceiling attracting sellers.

The Bigger Picture

Silver’s 2026 narrative transcends inflation hedging or monetary policy speculation. The market is pricing in a genuine structural transition in how the metal is consumed, supplied, and valued globally. With AI infrastructure expansion accelerating, physical inventories declining, and production unable to respond elastically, price discovery is shifting toward a higher equilibrium. In that context, US$70/oz represents less a bullish target and more a normalized base case. For market participants, the relevant question has evolved from “has silver already run too far?” to “has the market fully incorporated silver’s expanded role in the global technological economy?” Current evidence suggests that repricing cycle remains incomplete.