Silver is expected to remain in structural deficit for another year, supported by resilient investment demand and exceptionally low inventory levels, according to RBC Capital Markets, although the brokerage maintains a preference for gold over the medium term.
“Silver is entering its eighth deficit year with inventories at an all-time low and investment demand showing no signs of abating,” RBC analyst Marina Calero said in a research note, adding that a rapid rebalancing of the physical market appears unlikely.
Calero noted that the silver market ended 2025 with a supply shortfall of 242 million ounces (Moz) and forecasts that the market will remain undersupplied through 2026.
While higher prices could encourage some supply and demand adjustments, the analyst expects only limited improvement. Increased secondary supply and softer demand from jewellery and silverware segments could reduce the deficit by around 50Moz, but this would still fall short of closing the gap.
Mine production is also unlikely to increase materially in the short term due to permitting challenges, aging operations and a lack of significant new discoveries, Calero said.
She added that supportive macroeconomic conditions should continue to underpin investment demand, pointing to the “right macro ingredients” — including a weaker U.S. dollar, sustained appetite for real assets and more accommodative monetary policy.
Calero expects the gold-to-silver ratio to remain in a range of roughly 60–65x over the next few years as tight physical market conditions persist. However, she adopts a more cautious stance on silver over the medium term, highlighting growing risks to industrial demand, particularly from the solar sector.
Industrial demand “remains the biggest question mark,” Calero stressed. Industrial applications accounted for around 60% of total silver consumption in 2025, and silver now represents approximately 30% of average solar cell production costs, encouraging accelerated thrifting and substitution efforts.
Despite supportive near-term dynamics, RBC ultimately favours gold producers. Nevertheless, the brokerage said silver equities “remain attractively valued compared to the broader market,” even though many stocks already reflect optimistic assumptions for silver prices.
“With solar accounting for 17% of the total demand (c.190Moz of demand in 2025) a silver-free solar technology could be the final cure to high prices,” the analyst wrote.
Looking at equities, Calero identified Hochschild Mining and Coeur Mining among her preferred names, while Wheaton Precious Metals and OR Royalties stand out within the royalty segment.
“Silver equities’ premium to gold producers is above the historical average, with producers in our coverage pricing in $100/oz, and royalties at $144/oz, above spot levels of $90/oz. Valuation, coupled with our higher expected upside in gold, leaves us favouring pure-gold producers,” she wrote.
Even so, the analyst noted that the silver sector continues to screen attractively relative to the broader equity market despite recent underperformance compared with the underlying metal.