Although silver failed to maintain its initial momentum this week after breaking above $39 per ounce, the precious metal is still holding onto impressive gains near 14-year highs. According to one investment bank, this may mark a high point through 2026.
Robust industrial demand has supported the silver market and has been a key driver behind its notable supply deficit. However, the Macquarie commodity team led by Marcus Garvey, points out that investment interest now dominates. The team stated in a report released late last month:
"As we argued in March, in a healthy physical supply-demand backdrop, ‘the return of stronger financial buying, including via derivative positions, retains scope to drive silver to a period of marked outperformance’, and we believe that this is what is driving prices higher."
Notably, the latest trading data reveals an interesting divergence in the silver market: speculative futures investors have been taking profits, while ETF investors are increasing their positions.
The U.S. Commodity Futures Trading Commission's (CFTC) Commitment of Traders report for the week ending July 8 showed that fund managers increased their gross speculative short positions in Comex silver futures by 1,934 contracts. At the same time, long positions fell by 237 contracts.
Silver's net-long positioning currently stands at 42,756 contracts, down nearly 5% from the previous week.
Analysts also point out that CFTC trading data shows that swap dealers are holding record short positions. Some analysts believe this may be linked to rising ETF demand.
Last week, global silver exchange-traded funds (ETFs) saw net inflows of 322,000 ounces. Silver holdings in ETFs have climbed to 775 million ounces, the highest level since August 2022.
Despite this, Macquarie remains bullish on silver, but the bank believes the current rally has a ceiling.
In its mid-year commodities report, analysts raised their silver price forecasts for this year due to increased investor demand. The Australian bank now expects silver prices to average $36 per ounce in the third quarter, up from its previous forecast of $33. For the final quarter of this year, prices are expected to average around $35 per ounce -- a 13% increase from prior estimates.
“Our previous forecasts had assumed this would be difficult against the backdrop of a trade war, but the resilience of global growth and broader market performance has created a window of opportunity for silver to perform, and we are therefore marking our forecasts to market,” the analysts said.
While silver is expected to maintain gains above $30 per ounce through 2026, Macquarie expects silver prices to peak this summer.
Looking ahead to 2026, analysts forecast that silver prices will average between $33 and $34 per ounce in the first quarter and between $29 and $30 per ounce in the second quarter -- an increase from previous estimates of $29 and $30, respectively. The analysts said:
“Moving into the second half of 2025, we expect dynamics to shift as silver once again benefits from strong gold price performance, but it may lose its tailwind as a risk asset as global industrial production growth slows and pre-tariff advanced purchasing demand fades, however, moving into 2026, as global economic growth re-accelerates, silver should outperform gold. We expect the gold-silver ratio to fall to around 83. In absolute price terms, silver prices should also show resilience, but the drag from gold means our base case is that they remain in the near-term range.”
The gold-silver ratio, which reflects the number of silver ounces required to purchase one ounce of gold, is a crucial indicator for investors. A lower ratio, as Macquarie predicts for 2026, suggests that silver is outperforming gold, potentially offering better returns.
Geopolitical tensions and economic uncertainties can significantly influence precious metal prices. Silver, being both a precious metal and an industrial metal, is particularly sensitive to these factors. Monitoring global events is essential for understanding potential price fluctuations.
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