To begin with, it is important to note that BoA’s prediction for silver’s price evolution does not define a short-term price outlook, but rather a potential long-term cyclical scenario. It relies on historical parallels, monetary policy, inflation, and the development of the gold-to-silver ratio. In the base projection, the level around 135 USD per ounce appears for 2026, while under an extreme compression of the gold-to-silver ratio, analysts even project prices above 300 USD. These are not new or unprecedented considerations, but models grounded in past market cycles.
The Key Ratio
One of the most important long-term indicators remains the gold-to-silver ratio. History shows us that the sharpest growth phases for silver occur when this ratio declines rapidly. Example years for this would be 1980 and 2011, when exponential growth in silver was accompanied by a significant compression of this indicator. At the time, macroeconomic factors also played a role, 1980 was marked by high inflation, while 2011 was affected by the aftermath of the global financial crisis. Ultimately, if gold rises and silver starts to outperform it, the ratio compresses further, creating a feedback loop that supports even higher silver prices.
Why is there a Deficit in the Market?
Unlike gold, silver has one crucial property. A large part of its production is consumed in industry, thus disappearing irreversibly from circulation. According to available data from the Silver Institute, the global silver market has been in deficit for several years in a row, and 2026 is expected to be the sixth consecutive year when demand is likely to exceed supply. One of the primary reasons is that recycling is inherently technologically challenging and inefficient on a large scale, which leads to a decline in above-ground reserves and increasing price sensitivity to high demand impulses.
Industrial Demand
Another fundamental factor is the structural shift in demand. Silver is now a key raw material for solar panels, electric vehicles, advanced electronics, AI infrastructure, and broader energy transformation. Crucially, this demand is growing independently of investment sentiment, and this is where the uniqueness of silver lies. It combines the function of an investment and precious metal with that of an industrial raw material.
*Past performance is not a guarantee of future results.
[1,2] Forward-looking statements are based on assumptions and current expectations that may be inaccurate or based on the current economic environment, which may change. Such statements are not a guarantee of future performance. They involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.
