DBT Bureau
Pune, 1 March 2026
Silver prices are witnessing heightened volatility after rebounding nearly 27% from $64.10 to $91, driven by safe-haven demand and tightening physical supply conditions across global exchanges. According to the latest report by Kedia Advisory, the global silver market is heading into its sixth consecutive annual deficit in 2026, with a projected shortfall of 67 million ounces.
The report highlights that total global silver supply is expected to reach 1.05 billion ounces this year, while mine production is forecast to grow only 1% to 820 million ounces. Over 800 million ounces of global reserves have reportedly been exhausted since 2021, reinforcing structural tightness in the market.
Exchange inventories continue to shrink sharply. COMEX registered silver stocks have fallen below 90 million ounces to 88.2 million ounces — a 75% decline from 2020 levels — while March open interest stands above 230 million ounces, implying a significant paper-to-physical imbalance. Meanwhile, Shanghai exchange inventories have dropped to a decade low of 318 tonnes, with premiums widening to $10 above Western spot rates, accelerating the physical metal shift toward Asian markets.
On the demand front, silver ETFs recorded $2.44 billion in weekly inflows amid geopolitical uncertainty, while overall investment demand has risen 11% year-to-date. However, high prices have triggered substitution trends in the solar photovoltaic (PV) sector, where manufacturers are cutting silver usage by 7–10% through copper alternatives. In India, silver jewelry demand has declined 9%, and silverware demand is projected to contract 17% due to elevated domestic prices.
Kedia Advisory noted that lease rates have surged to a record 8%, signaling stress in immediate physical delivery markets. Technical indicators suggest momentum remains strong, with RSI and MACD readings supporting further upside, though volatility expansion warns of sharp corrective swings.
For the near term, the firm recommends a “buy on dips” strategy, citing support levels at $85–$82 and upside targets of $98–$102 in the 1–2 month horizon. Over a three-month outlook, the brokerage sees potential for silver to test $102–$110, backed by structural deficits, inventory depletion, export curbs, and sustained ETF inflows.
With tightening supply dynamics and persistent geopolitical uncertainties, silver remains firmly in focus as both an industrial and investment asset in 2026.
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