UBS Slashes Silver Deficit Projection by 80% for 2026 — Prices Hit
By John Nada·May 16, 2026·2 min read
UBS cuts silver deficit estimate by 80%, forecasting sideways trading. Demand shifts in photovoltaics and jewelry hit consumption.
Silver hit an all-time high of $121.64 on January 29, but by mid-May, the glitter seemed to be fading. Trading at $84 by May 14, the metal had briefly touched $87 on the back of US-China tariff optimism. However, April's CPI data swiftly pulled it back, according to Yahoo Finance.
UBS, in a stark move, has drastically cut its global supply deficit estimate for silver in 2026 from 300 million ounces to just 60-70 million ounces, an 80% reduction that reshapes the narrative that has driven silver's rally in recent years. The bank's analysts, Wayne Gordon and Dominic Schnider, unveiled this shift, as reported by Seeking Alpha.
This isn’t a mere number shuffle. The bank's price targets were slashed accordingly: end-second-quarter 2026 down to $85 from $100, end-September to $85 from $95, and year-end to $80 from $85, with the March 2027 forecast dropping to $75, noted NAI 500. UBS now anticipates silver will "trade broadly sideways" for the rest of the year.
Three demand-side headwinds, each fueled by the earlier price surge, are behind the deficit revision. First, the photovoltaic sector, once a robust driver of silver consumption, is cooling off. Manufacturers are switching to lower-silver technologies due to the increased cost per watt of silver paste. Gordon and Schnider highlighted this shift in their note, mentioned by deVere Group.
Silverware and jewelry face a similar fate. High prices have led consumers to pull back, shrinking demand. Meanwhile, investment demand isn't picking up the slack. Known ETF holdings have slumped by nearly 70 million ounces, with net speculative futures positions barely above 100 million, according to Investing.com.
All told, UBS expects these channels to lower silver consumption by approximately 50 million ounces this year. In a market often driven by scarcity stories, this dramatic recalibration underscores a profound shift in silver's immediate future.