Silver's 6.3% Slide Puts the Deficit Story to the Test as Solar Demand Cracks
Published on 10/31/2026 at 09:10 | Editorial boerse-global.de
Silver closed yesterday at USD 49.14 per fine ounce, down 6.3% on the day — a move that says as much about the metal's vulnerability to financial-market stress as it does about its own supply-demand balance. Technical indicators showed no sign of the selling pressure easing as of today, according to media reports, leaving investors to weigh near-term downside against longer-horizon price targets that remain, on paper at least, considerably higher.
A Selloff With Several Engines
The trigger came from outside the silver market. A rout in technology stocks dragged precious metals lower, with Reuters attributing the pressure to doubts over the returns on heavy investment in artificial intelligence. Inflation worries and expectations of a longer stretch of elevated US interest rates piled on. Higher energy prices fed the same anxiety, reinforcing fears of persistent inflation and a Federal Reserve in no hurry to loosen.
Layered on top was a liquidity story. Forced selling and margin calls may have amplified the losses in precious metals, Reuters reported — meaning silver came under pressure not solely because of its own demand outlook. Investors may also have liquidated the metal to raise cash. Such sales need not reflect silver's longer-term prospects, though they can certainly sharpen the short-term downdraft. How much of the decline each factor explains cannot be teased out from the data.
The Physical Picture Is Softening
A quarterly outlook from Sucden Financial published on Wednesday added a less encouraging note on the industrial side. The house expects industrial silver fabrication to fall 3% in 2026 to 639.6 million ounces. The solar industry is doing much of the damage: manufacturers are cutting the amount of silver used per module and beginning to deploy copper-based technologies. That caps demand for the metal regardless of the day-to-day turbulence in financial markets.
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Sucden projects photovoltaic demand dropping 19% to roughly 151 million ounces. Even so, it still sees a supply deficit of 46 million ounces — which would mark the sixth consecutive annual shortfall. The juxtaposition explains the apparent contradiction: tight supply does not preclude falling prices when demand expectations and financial conditions deteriorate at the same time. Market observers also expect the gap between supply and demand to narrow, so what matters for investors is not merely that a deficit exists but how it evolves.
Two Horizons, Two Messages
Mirae Asset Sharekhan warned yesterday that silver could extend its slide to USD 48 per fine ounce. The research house draws an explicit distinction between time frames: further declines are possible in the near term, while lower levels look attractive over the medium and long run. That view is not a call that a bottom has formed — it describes the tension between persistent selling pressure and a potentially more favorable long-term entry point.
UBS Global Wealth Management sits at the other end of the horizon. In a research note dated October 25, the bank forecast silver at USD 70 per ounce by December 2026, citing demand from AI infrastructure and structural supply deficits as supports. On artificial intelligence, the two narratives collide directly: while doubts about the profitability of AI investment weighed on markets yesterday, UBS treats the build-out of infrastructure as a potential demand driver. The bank did acknowledge near-term turbulence as well as material savings and substitution in the solar industry.
What Would Signal a Turn
The market assessment published today puts the probability of a US rate hike in December at 70–80% — far from a done deal. As long as expectations of tighter monetary policy dominate, any recovery remains fragile. Higher real yields and inflation worries have been among the heaviest weights on silver of late.
Silber Preis at a turning point? This analysis reveals what investors need to know now.
For a durable rebound, selling pressure would first need to fade and rate anxieties to recede. A lower price on its own offers no proof of that. Nor does the annual forecast contradict the possibility of further short-term losses.
A scheduled checkpoint may sharpen the picture: media reports point to a mid-November 2026 interim review of the silver market forecast by Metals Focus and the Silver Institute, which could show whether the deficit projection has shifted. The decisive question, then, is not simply whether silver stays scarce — but how industrial demand evolves alongside it.
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