Silver Outlook 2026: Supply Tightness Meets Near-Term Correction Risks

Alexander Campbell’s latest view offers a nuanced take: despite the blistering silver rally in 2025—up ~156 % year-to-date, ~30 % in December—he flags several transitory risks that could provoke a pullback in the near term [1]. These include tax-loss harvesting, margin hikes, dollar strength, overbought technical conditions, and substitution risk via copper in industrial usage. All are credible in light of late-year dynamics and conventional pressure points often seen at peaks in commodity cycles.

On the flip side, Campbell (and corroborated by multiple market data sources) points to stronger long-term tailwinds: structural deficits, rising industrial demand—especially from solar and AI/data center applications—divergence between paper and physical silver (e.g., spot premiums, backwardation), and regulatory changes, notably China’s export licensing rule for silver starting January 1, 2026, which may materially constrain supply [1].

Comparative reports reinforce these findings: major analysts see ongoing deficits in 2025 (100-120 million ounces per year or more) and inflows into silver ETFs reaching tens of millions of ounces, which tighten available physical supply and escalate sensitivity to speculative and macro drivers [2][3][6]. Also, the U.S. critical minerals designation, export policy shifts in China, and broader macro dynamics (dollar moves, inflation, Fed policy expectations) create both support thresholds and risk levers [2][3][5].

Strategic implications: investors might consider short-term hedges or profit management strategies ahead of expected volatility at year-end; those with conviction in the bull case should assess physical silver exposure and monitor regulatory/supply chain risks closely; industrial users may need to plan for cost and input disruptions; funds and passive players need to be wary of forced selling through index rebalancing and margin increases.

Open questions include: how tight will physical supply become under China’s export licensing; how deeply will industrial substitution (especially copper) take hold at higher silver prices; to what extent will macro policy, particularly USD movements and Fed guidance, shift investor behavior; what are the risks of speculative excess, especially as backwardation and premiums widen.