Silver Market Faces Eighth Year of Deficit, RBC Reports

RBC Reports Eighth Consecutive Year of Silver Deficit

RBC Capital Markets has highlighted that the global silver market is entering its eighth straight year of a structural deficit. The imbalance is primarily driven by strong, unabating investment demand and physical inventories reaching an all-time low.

Current Market Dynamics

Analyst Marina Calero from RBC noted that the physical market is not expected to rebalance in the near future. The market closed 2025 with a substantial deficit of 242 million ounces, and this undersupply is projected to persist through 2026. This prolonged squeeze underscores the tight conditions facing the silver supply chain.

Impact on Investment Outlook

The persistent deficit is a key factor supporting silver prices. However, despite the tight physical market for silver, the RBC report also mentioned a preference for gold over the medium term, suggesting that investors may weigh different factors when choosing between the two precious metals for longer-term holds.

Conclusion

The silver market's supply-demand imbalance remains a critical theme. While the deficit supports prices in the short term, the market's long-term trajectory will depend on sustained investment interest and its performance relative to other assets like gold.

FAQ

Q: Why is the silver market facing a deficit?
A: The deficit stems from a combination of strong investment demand and historically low physical inventories.

Q: How large was the silver deficit in 2025?
A: According to RBC Capital Markets, the silver market deficit was 242 million ounces in 2025.

Q: What is the forecast for silver in 2026?
A: The market is expected to remain undersupplied throughout 2026.

Source: Investing.com