New Delhi: Silver prices are currently near equilibrium levels. Improved investor demand could support prices, but a strengthening US dollar and increased supply could limit any significant upside, a report released on Monday predicted.
According to a report by HSBC Global Investment Research, the silver market is expected to experience a shortage of 140 million ounces in 2025. However, this shortage is projected to narrow sharply to 5 million ounces in 2026. It is expected to rise slightly to 12 million ounces in 2027.
The report states that the reduction in market shortages makes sense, suggesting silver prices remain near equilibrium levels. This could support prices, but a sharp rise is unlikely.
Impact of Supply and Recycling on Silver Prices
According to the report, ground-level silver reserves and silver obtained through recycling could limit significant future price increases. These factors could also exert pressure on prices in the long run.
On January 29, 2026, the price of silver reached a record high of $121 per ounce. Record gold prices, limited silver supply, tariff concerns, geopolitical tensions, and economic uncertainty were the main reasons behind this. Under these circumstances, investors turned to safe-haven investments.
Impact of Middle East Conflict and a Strong Dollar
According to the report, conflict in the Middle East increased demand for the US dollar. Meanwhile, high crude oil prices raised fears of tighter monetary policy, while stock markets also saw a decline.
The HSBC report stated that the trend of gold prices will continue to influence silver. The report expressed a positive outlook on gold, which is expected to continue supporting silver prices.
Tariff Concerns May Push Prices
According to the report, silver prices could rise further if tariff concerns resurface. However, demand for silver from the industrial and jewelry sectors is expected to remain weak.
This year, the impact of reduced silver ore and the closure of some mines is expected. However, this is expected to be largely offset by new projects and expansion of existing facilities.
Another recent report stated that silver exchange-traded funds (ETFs) held approximately ₹85,000 to ₹86,000 crore in assets as of August. The report also noted the increasing trend of financial investment in gold, the expansion of the commodity derivatives market, and structural demand growth for industrial metals such as copper and aluminum.