Is the silver deficit story over?

For several years the case for silver has rested on one idea: the world uses more silver than it mines and recycles, so the gap must eventually be filled by higher prices. Deutsche Bank is now questioning how long that lasts. Its head of metals research, Daniel Ghali, sees the market moving from deficit to surplus as soon as 2027, according to a report in The Northern Miner.

From $121 to about $60

Silver set its all-time high of about $121.6 an ounce on 29 January 2026 (sources differ by a few cents on the exact peak). On Friday it closed around $60.70 — roughly half that peak. A move that size invites the question of whether the reasons people bought silver have changed, and the Deutsche Bank note is one attempt to answer it.

Solar thrifting and the demand shift

Solar panels have been the fastest-growing source of silver demand, because silver paste is used to carry current off each cell. But silver is expensive, and when it is expensive manufacturers find ways to use less of it — a process the industry calls thrifting. Ghali’s argument, as reported, is that thrifting by solar makers is now easing demand — the report puts the fall in silver used per solar cell at 17% in 2026 — at the same time as inventories rebuild in London, New York and Shanghai, and as India’s silver imports run about 25% below year-ago levels.

The inventory picture

The most concrete number in the report is from London: the amount of freely available silver in London vaults is up 70% since October 2025. “Freely available” matters here — it is metal not already committed to ETFs or other holders, and so can actually be lent or delivered. A shortage tends to show up first as scarce, expensive-to-borrow metal in London; a rising free float is the opposite signal.

What Deutsche Bank expects

The bank forecasts an average silver price of about $70 an ounce in the second quarter of 2027. That is Deutsche Bank’s forecast, not ours — we do not publish price forecasts. It is worth noting that it sits above Friday’s price: a market moving into surplus is not the same thing as a market where the price must fall, because a lot of the adjustment may already be in the price after a 50% drop.

The case for caution on the call

A surplus forecast depends on its inputs staying put, and the report itself flags a risk in the other direction: a persistent premium for silver in China, which would point to tighter conditions there. Thrifting slows if silver gets cheaper, because the incentive to economise weakens; and solar installations, industrial demand and Chinese imports can all surprise in either direction. The deficit story was itself a forecast that turned out to be very profitable for a while and then very painful. Treat this one the same way: as one well-sourced view, from a named bank, on what happens next.

For the levels traders are watching right now, see Silver at $60: key levels to watch this week. The gold-to-silver ratio shows how silver has fared against gold over the past year.

Every figure here is as reported by the publications listed under Sources, at the time they reported it. Prices move; the live gold price has the current one. Nothing on this page is investment advice.