Silver to Outshine Gold by Late 2026: Supply Deficit Forecast

Silver is projected to become relatively cheaper than gold as 2026 draws to a close, according to an analysis by Monarch PMS. The firm highlights that the gold-silver ratio has increased to approximately 69x, signaling a potential shift in valuation dynamics.

Key Price Projections for Late 2026

• Gold: Expected to trade between $4,300 and $4,700 an ounce.
• Silver: Forecasted to range from $70 to $85 an ounce.

Monarch PMS suggests that a persistent supply deficit and a tight physical market for silver are key factors that could drive further price increases. Silver’s current valuation remains below its model midpoint, indicating room for upward movement.

Silver’s Supply Dynamics

• Annual Deficit: The market is experiencing a sixth consecutive annual deficit.
• Stock Draws: Significant draws from above-ground stocks have occurred since 2021.
• Mine Supply: Global mine supply for silver has remained flat.

The base case outlook from Monarch PMS is built upon several assumptions crucial to market stability. These include the US Federal Reserve maintaining interest rates through September, alongside normalized energy prices and stable real yields.

Continued gold purchases by central banks also form a part of this optimistic scenario. This sustained demand from institutional buyers underscores the broader bullish sentiment in precious metals.

Market Risks and Opportunities

• Bear Case: A scenario where the US Federal Reserve raises interest rates could negatively impact prices.
• Bull Case: If the Fed eases its policy due to labor market weakness, it could provide a significant upside.

The disparity between paper claims and physical inventory on COMEX could further amplify price movements. Any rise in physical demand might trigger more pronounced shifts in the market.