Silver: Why the $100 mark is both within reach and dangerous

May 28, 2026

Silber-Anleger erleben derzeit ein zähes Ringen: Kurzfristig fehlt dem Markt unterhalb der Marke von 75 US-Dollar jSilver investors are currently facing a tough struggle: In the short term, the market lacks the necessary momentum below the $75-per-ounce mark. Yet explosive momentum is building in the background. While Bank of America (BofA) believes another jump to the three-digit $100 mark is possible before the end of the year, the analyst team also warns against premature optimism. Such a price surge is unlikely to signal a lasting trend reversal. Rather, according to the analysts, the silver market is facing a profound fundamental shift in which the industrial base is increasingly crumbling.

The balancing act between precious metal fantasy and industrial reality

Bank of America’s latest precious metals analysis paints a picture of a divided market. In the short term, silver has the potential to break through the $100-per-ounce mark in the wake of a sustained gold rally. However, this speculative high is unlikely to last: Analysts are already forecasting a return of the price to a level of around $75 as early as the second quarter of 2027.

Currently, the gold-silver ratio of 59.43 points reflects this indecision. It remains in the middle of its months-long consolidation range—an indicator of a market that is sensitively oscillating between short-term speculation and a fundamental revaluation. Although the silver market is heading toward its sixth consecutive year of deficit, the sustainability of this supply shortage is under massive threat in the medium term.

Solar Industry in Austerity Mode: The Key Demand Pillar Wavers

The strongest headwind for the silver price is emerging, of all places, in its former flagship segment—photovoltaics. Faced with historically high silver prices, solar module manufacturers are responding with drastic efficiency measures. Under sustained margin pressure, they are systematically reducing the silver content in the cells or switching to cheaper substitute metals.

According to BofA analysts, silver demand from the solar sector already reached its historic peak last year. This trend is exacerbated by stagnating solar production in China and the prospect of declining new installations in the current year. Since demand growth in other industrial sectors is too weak to close the gap left by the solar industry, the silver market faces a fundamental easing of supply-demand dynamics: as early as 2026, the deficit could shrink by a massive 90%. Should industrial demand continue to weaken, even moderate sales by financial investors would be enough to push the market into a physical surplus.

Investors as the Deciding Factor

In this changed environment, silver is likely to be perceived and traded more as a classic precious metal rather than an industrial metal in the future. Investor demand thus becomes the decisive price factor. This carries risks, as precious metals have recently suffered from the restrictive interest rate policy and expectations of further rate hikes by the U.S. Federal Reserve.

Rising yields increase the opportunity costs for non-interest-bearing investments and weigh equally on both gold and silver.

Nevertheless, silver remains a strategic element of the global energy transition. An abrupt slump in solar demand is not expected. Demand is further fueled by geopolitical conflicts such as the war in Iran, which continues to drive the global push for green energy and alternatives to fossil fuels.

Geopolitics and Trade Barriers as Price Drivers

Just how volatile the physical market can be was already evident at the start of the year, when the silver price briefly shot up to $120 per ounce amid fierce competition for physical metal. A major source of uncertainty remains the upcoming renegotiation of the North American Free Trade Agreement between the U.S., Canada, and Mexico. Since Mexico and Canada are the main suppliers to the U.S. market, significant trade risks loom.

Concerns about potential tariffs have already prompted banks and market participants to massively increase their holdings within the U.S. This domestic hoarding is draining important liquidity from the global market. According to BofA, this physical withdrawal is the main reason silver has recently managed to climb back above the $80 mark—even though physically backed ETFs are continuously recording outflows and the latest CFTC data signal rather subdued interest in new net long positions in the futures markets.

Conclusion: In the short term, silver retains the potential for a breakout toward the $100 mark. However, the foundation for this rise is becoming more fragile. Investors betting on silver should keep an eye on the weakening industrial data, which could set tight time limits on the rally.

Source：https://goldinvest.de/en/silver-why-the-usd100-mark-is-both-within-reach-and-dangerous