“Silver is one of those markets where patience can look like a mistake for a long time — until, suddenly, it starts to look like a very smart decision.”
Our view was shaped long before the recent rally. We lived through the period when silver was trying to break $30 an ounce and the excitement felt almost tangible.
- February 1, 2021: London silver benchmark — $29.585
- September 1, 2022: London silver benchmark — $17.770
- The decline: almost 40%
Anyone holding silver did not need a lesson in volatility. They could see it in the value of their position.
Years like that taught us to separate belief in a metal’s long-term potential from an expectation that the market will agree with us immediately.
Today, we still see good reasons to be positive about silver.
Beneath the short-term price moves lies an unusual combination of:
- investment demand
- industrial use
- supply that cannot adjust overnight
When $30 Looked Within Reach
At the start of 2021, it seemed silver needed only one last push. It approached $30, and the attention it attracted was extraordinary.
Then came a move long-term investors know all too well: the breakout failed, enthusiasm faded, and the price eventually fell well below $20.
The nearly 40% decline from the high to September 2022 is more than an interesting historical statistic. It shows how wide the gap can be between “we are right about the long-term case” and “the price is finally moving our way.”
At a moment like that, it is tempting to call every drop an opportunity. We have learned to be more precise.
- Sometimes a decline is an opportunity.
- Sometimes the circumstances have changed and the original case needs another look.
When the price moved away from $30, silver did not stop being an industrial and investment metal. What changed was the market’s willingness to pay for that combination. That distinction matters.
For a long time, the price can tell a different story from the annual balance of supply and demand. Patience during those periods means repeatedly asking whether the reasons we own or follow the metal still hold.
What Keeps Us Interested After the Big Declines
According to the Silver Institute’s April report, global silver demand exceeded supply in 2025 for the fifth consecutive year. It forecasts a deficit of 46.3 million ounces for 2026. That gives us a specific question to follow: where will the market find the metal needed to close the gap?
| Indicator | 2025: actual | 2026: April forecast |
|---|---|---|
| Total demand | 1.13 billion ounces; down 2% year over year | About 1.11 billion ounces; expected to fall 2% |
| Industrial demand | 657.4 million ounces; down 3% | Expected to decline another 3% |
| Mine production | 846.6 million ounces; up 3% | Expected to remain broadly flat |
| Coins and investment bars | Demand up 14% | Demand expected to rise 18% |
| Market balance | Fifth consecutive annual deficit | Forecast deficit of 46.3 million ounces |
The 2026 figures are estimates, not final results.
The most revealing part of that table, to us, is what initially looks like a contradiction. Total and industrial demand are expected to fall, yet another deficit is forecast. At the same time, the same outlook expects investors to buy more coins and bars. Different parts of the market are moving in different directions.
A deficit does not mean a buyer will be unable to find silver tomorrow. The market can draw on metal mined in earlier years, and silver moves between investors, vaults, and regions. But when a market repeatedly balances by drawing on existing stocks, it makes sense to ask how accessible those stocks are and what price their owners would accept to release them. That is where long-term figures can begin to matter in day-to-day trading.
What Happens When Investors Start Coming Back
As silver fell away from $30 after 2021, the hardest part was not understanding what the metal is used for. It was watching how quickly financial-market interest could disappear.
Industry still needed silver for its products, but that demand alone did not prevent a steep fall in price. We remember that experience when we talk about the potential for another advance.
That is why the return of buyers of investment coins and bars stands out to us in the 2025 data.
- Global coin and bar demand: up 14%
- India: up 33%
- Europe: first year-over-year gain in three years
- Silver Institute 2026 forecast: another 18% increase
Global demand in this category rose 14%, even as total silver demand declined. It increased 33% in India, while Europe recorded its first year-over-year gain in three years. The Silver Institute forecasts a further 18% rise in coin and bar demand for 2026. Actual purchases still have to confirm that outlook.
We see a possible shift in sentiment here, though not yet proof that the whole market has turned.
Physical buyers are not returning at the same pace everywhere, and some of the growth may follow several weaker years. We will watch whether it lasts and spreads to more regions.
After seeing silver fall from nearly $30 to below $18, we know how much it matters whether industrial users are joined by people who actually want to own the metal.
The Physical Market and Futures Do Not Always Move at the Same Speed
Silver has two rhythms.
In futures, traders react quickly to the dollar, interest rates, and expectations for central-bank policy. In the physical market, mining, refining, shipping, and delivery take longer.
One rhythm can dominate the price while the other changes much more quietly.
The latest CFTC report showed open interest of 106,474 standard COMEX silver futures contracts as of September 22. At 5,000 ounces per contract, that represents notional exposure equivalent to 532.37 million ounces.
It does not mean contract holders are requesting delivery of that much physical silver. It does show how much scope changing financial positions have to influence the price in the short term.
The report recorded 48,987 short contracts and 22,745 long contracts for swap dealers. In a single week, their shorts rose by 905 contracts while their longs rose by only nine.
We watch changes like this because positions can tell us who is carrying risk and how the market’s structure is shifting.
We apply similar care to COMEX inventories.
Registered and eligible are different vault categories; a change between them does not necessarily mean silver has physically left a warehouse. We want to see whether inventory changes are accompanied by deliveries, movements of metal, and higher costs of obtaining it.
In 2025, the Silver Institute described regional tightness in available silver and elevated lease rates.
That episode showed why one aggregate inventory figure cannot tell the whole story.
Optimism Has to Hold Up Against Uncomfortable Data
It would be easy to say that AI, solar panels, and electric vehicles will use more and more silver, so the price has to rise.
That simple story would convince us less than an honest look at the numbers.
Solar manufacturers are reducing the amount of silver used in individual products and looking for substitutes. The Silver Institute therefore expects another decline in industrial demand this year, even as data centers, vehicles, and power grids support other uses.
High US Treasury yields are another headwind.
On September 25, the ten-year nominal yield stood at 5.17%, and the corresponding real yield was 2.83%. Silver pays no interest; investors have an alternative they cannot ignore.
We would not be surprised by further stretches of sideways trading or sharp swings.
Even so, we remain positive.
Investment demand could strengthen while physical supply adjusts slowly and the market continues to draw on existing metal.
We have seen how quickly silver can disappoint expectations. That is why we also take the opposite possibility seriously:
after a long wait, several important forces could finally begin moving in the same direction.
How We Will Know Whether Waiting Is Becoming a Trend
After living through the fall from nearly $30 to below $18, we do not confuse patience with a duty to defend one prediction forever. We would rather watch for signs that the conditions for lasting interest in silver are coming together:
- Yields and the dollar: Is the pressure favoring interest-bearing assets beginning to ease?
- Investment demand: Are forecasts for stronger coin and bar purchases showing up in actual results?
- Futures positioning: Is capital returning to silver for more than a few trading sessions?
- Physical metal: Are inventory changes supported by deliveries, metal movements, and the cost of borrowing or sourcing silver?
We do not need all four signals to turn positive on the same day. The more they begin to confirm one another, however, the stronger the case that we are seeing a lasting change.
Anyone who held silver through the decline from 2021 into 2022 knows patience is rarely comfortable. We have not forgotten that experience. It taught us to look beyond the daily price, acknowledge the weak points in our own view, and pay attention when the market’s underlying picture starts to change. That is why we are still watching silver — with more respect for its swings, and more conviction that its story deserves attention.
Leave a Reply