More Stories

Informist, Thursday, Mar. 12, 2026

 

MUMBAI – Macroeconomic and geopolitical developments in West Asia are expected to drive silver prices in 2026, according to BMI, a Fitch Solutions company. However, BMI does not expect prices to immediately return to the record high levels witnessed in January given the easing tightness in the physical market. Silver prices hit a record high in January, with prices reaching $121.76 per ounce on Jan. 29.

 

BMI has raised its average silver price forecast to $93 per ounce in 2026 from an average of $40 per ounce in 2025. "Front and center is the conflict currently unfolding in the Middle East, which follows US-Israeli strikes on Iran during the weekend of February 28-March 1 2026 (Feb. 28–Mar. 1)," BMI said. While silver mostly tracked gold prices upwards when the market opened on Mar. 2, prices fell sharply by 14% on Mar. 3 on fears that a crude oil price shock could trigger risks of inflation or recession, factors that typically weigh on silver because of its widespread industrial use. "Even if silver remains vulnerable to a slowdown in global economic activity, on balance we think growing pessimism about the US dollar and fiat currencies generally favours silver as a hard asset," it said.

 

On the demand front, the company expects investors to drive most of the gains in silver this year. Last year saw record inflows into silver-backed exchange-traded funds as a rate cut by the US Federal Reserve increased demand for non-yielding assets, with bullish fundamentals and technical indicators shining a spotlight on silver after it underperformed gold in both 2023 and 2024, it said. 

 

However, BMI anticipates that silver will mostly trade in lockstep with gold even if it displays significantly higher volatility. The gold-to-silver ratio is near to the long-term historical average of 60:1, suggesting further gains for silver are unlikely without the gold prices underperforming. "We think this is unlikely to happen, given that gold demand is broader and deeper than demand for silver, being a beneficiary of central bank purchases which we expect to continue throughout 2026," it said. 

 

Meanwhile, the company expects softer industrial sector demand in 2026 compared to previous years. In 2025, about 17% of silver consumption came from solar panels, where the metal is used as a conductive paste in photovoltaic cells. Solar capacity expanded rapidly between 2020 and 2025, with installations rising around 26% annually, driven by subsidies and feed-in tariffs, especially in China. However, growth is projected to slow down to about 16% in 2026, with a notable slowdown expected in China as authorities rein in overcapacity. Rising silver prices have also pushed up solar panel production costs, which could encourage manufacturers to shift toward cheaper alternatives like copper.

 

In the long term, silver prices will mostly track gold prices, with the gold-to-silver ratio continuing to average 60:1, as it has since 1970. "Despite what we see as technical and structural limitations on the long-term performance of silver prices vs gold, we remain relatively bullish on the core fundamentals underpinning silver as an asset," it said.

  

"The risks to our price forecast are two-sided but generally skewed to the downside for H1 (Jan-Jun) 2026, given the conflict currently unfolding in the Middle East (West Asia)," BMI said. If a crude oil price spike causes a slowdown in economic activity in key markets such as China, silver is expected to suffer because of lower industrial consumption, even if safe-haven demand rises. "For now, we assume the Middle East conflict lasts 2–3 weeks, which would allow silver to trade higher in Q2 (second quarter) assuming a reversion to pre-conflict rate cut expectations in late-March/early-April," BMI said.  End

 

US$1 = INR 92.15

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Reshma Ravi

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.