Silver Drops 6% as Market Weighs Supply Deficit Against Falling Solar Demand
Silver prices fell about 6% to around $55.60 an ounce, while the iShares Silver Trust (AMEX:SLV) dropped 6.11% to $50.22. The pullback continues a volatile period in 2026 following a 147% rally in 2025 that briefly pushed silver above $120 an ounce earlier this year. Prices are now approaching a major support zone at $54.50, an area that acted as price resistance in October and November 2025.
The decline comes as investors weigh competing supply and demand factors. Market forecasts project a sixth consecutive annual deficit of 46.3 million ounces in 2026, up from 40.3 million ounces in 2025, alongside a 2% drop in total supply. However, demand headwinds are growing as solar manufacturers reduce silver usage per cell by 17%, contributing to an expected global solar demand drop of more than 20%.
Looking ahead, traders are monitoring whether key support levels hold while physical stockpiles expand. Available inventories in London vaults have risen about 70% year-over-year to over 300 million ounces, pointing toward potential market surpluses by 2027. Continued trends in solar technology, interest rates, and physical buying in major global markets will determine silver's next direction.
Key points
- Silver fell about 6% to $55.60 an ounce, while the iShares Silver Trust (AMEX:SLV) dropped 6.11% to $50.22.
- Prices are nearing a key technical support level at $54.50 an ounce after falling from highs above $120 earlier in 2026.
- The market faces a projected sixth consecutive annual deficit of 46.3 million ounces in 2026 as total supply slips 2%.
- Solar industry silver usage per cell is expected to drop 17%, contributing to a projected decline in global solar demand of over 20%.
Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org
How we writeDisclaimerQuestions and answers
Why are silver prices falling in 2026?
Silver prices have pulled back due to falling solar industry demand, rising vault inventories, and lower imports, which have offset ongoing annual supply deficits.
What is the key technical support level for silver?
Silver is testing key support at $54.50 per ounce, a price level that previously served as major resistance in October and November 2025.
Is silver in a supply deficit?
Forecasts indicate a sixth straight annual deficit of 46.3 million ounces in 2026, though rising vault stocks suggest market surpluses could arrive by 2027.