Silver's Crossroads: Wall Street Trims Targets While the Supply Squeeze Endures
Published on 07/31/2026 at 07:21 | Redaktion boerse-global.de
The silver market is sending mixed signals. Physical demand continues to outstrip mine output for a sixth consecutive year, yet several of the biggest names on Wall Street have spent July dialing back their medium-term price forecasts. The result is a market caught between a structural bull case and a more cautious near-term outlook shaped by interest-rate expectations and dollar swings.
A Wide Spread of Forecasts
JPMorgan has trimmed its silver target to a range of $60 to $65 per ounce, a notable step down from its previous call of roughly $81. UBS, meanwhile, slashed its estimate for the global supply deficit by around 80 percent, now seeing a gap of just 60 to 70 million ounces. ING has pulled together its third- and fourth-quarter projections, and Commerzbank currently sits at a $67 target.
Yet the dispersion among banks remains striking. Citi continues to peg silver at $110 over the long term, Bank of America sees $85.93, and Goldman Sachs is working with a range of $85 to $100. The consensus compiled by the London Bullion Market Association stands at $79.57. With spot prices trading well below all of those figures, the gap between near-term market reality and longer-term expectations has rarely been wider. The gold-silver ratio, hovering near 69, suggests silver still has room to run relative to its yellow-metal counterpart.
The Deficit That Won't Close
None of the downward revisions, however, have come with a prediction that the supply shortage is about to end. Metals Focus and the Silver Institute put the global deficit for 2026 at 46.3 million ounces — the sixth straight year that mine production has failed to keep pace with demand. The shortfall is being driven primarily by industrial consumption: solar panels, electronics, and other technical applications are absorbing physical silver at a pace miners simply cannot match. That structural component is what separates the current debate from pure speculation, and it explains why even the most bearish banks are not calling for an end to the scarcity narrative.
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Producer Windfalls
The price strength has been a boon for producers, and First Majestic Silver's latest numbers illustrate just how directly higher prices flow through to the bottom line. Second-quarter revenue climbed 57 percent year over year to $415.5 million, with net income reaching $109.4 million and earnings per share of $0.22. Free cash flow hit $194.6 million, while cash holdings grew 34 percent since the start of the year to $1.2527 billion. Silver production rose 3 percent to just under 3.8 million ounces, with all-in sustaining costs of $25.68 per ounce. The company also raised its quarterly dividend by 217 percent to $0.0152 per share and bought back 1.2 million of its own shares for $22.7 million.
The Macro Crosscurrents
The recent price action has been anything but smooth. Softer-than-expected US inflation data initially weighed on the dollar and lifted precious metals, before the greenback recovered and silver gave back a chunk of those gains. The trigger was the core PCE price index for June, which rose just 0.1 percent month over month against a forecast of 0.2 percent. On an annual basis, the core rate came in at 3.3 percent, down from 3.4 percent the prior month. The headline PCE index actually fell 0.1 percent, with the annualized rate easing to 3.7 percent. Adding to the mixed picture, US GDP grew at an annualized pace of just 1.5 percent in the second quarter, well short of the 2.1 percent economists had expected.
The Federal Reserve held its benchmark rate at 3.50 to 3.75 percent for the fifth consecutive meeting, with a 9-3 vote that saw three members of the Open Market Committee push for an increase. Chair Kevin Warsh has made clear the central bank still does not consider its 2 percent inflation goal achieved, a view echoed by market analyst James Hyerczyk, who noted the Fed continues to regard price pressures as too elevated despite the recent cooling. Speculation about possible Japanese intervention added further pressure on the dollar at times, briefly boosting gold and silver, before rising US-Iran tensions helped the greenback firm again.
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What to Watch
For investors, the takeaway is a familiar one: the fundamental scarcity thesis remains intact, but short-term direction is being driven more by rate expectations and currency moves than by physical market dynamics. With geopolitical risks in the Middle East unresolved and the next US inflation reading due on August 12, volatility is likely to persist. Until then, the uncertainty over the Fed's next move leaves plenty of room for further swings in either direction.
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