Summary of Silver Market Analysis - Bank of America

Current Market Overview

As of May 28, 2026, silver prices have decreased by 1.5%, continuing a trend of significant sell-offs observed in recent sessions. Despite this decline, Bank of America (BofA) maintains a positive outlook on silver, projecting that prices could reach USD 100 per ounce in the fourth quarter of 2026. However, the bank cautions that any such rally is likely to be temporary.

Factors Influencing Silver Prices

BofA attributes the current bullish momentum in silver to several factors:

• The ongoing rally in gold prices.
• Geopolitical tensions affecting market dynamics.
• Limited liquidity in the physical silver market.

Industrial Demand Concerns

Despite the optimistic price forecast, BofA highlights that the industrial fundamentals for silver are beginning to weaken. Elevated prices are prompting manufacturers to seek alternatives to silver or reduce its usage. The photovoltaic sector, a significant driver of silver demand, may have peaked in 2025, with slowing solar panel production in China and a potential decline in new installations in 2026 posing risks to future demand.

Market Dynamics and Risks

BofA estimates that the global silver deficit could decrease by up to 90% this year, increasing the risk of a supply surplus even with modest selling from investors. The bank anticipates that silver will start to behave more like a precious metal rather than an industrial metal, becoming more reliant on capital flows, investor sentiment, and monetary policy expectations.

Despite these challenges, BofA believes that silver demand will not collapse sharply, as it remains essential for the global green energy transition. The ongoing conflict with Iran is also expected to support long-term silver demand through investments in alternative energy technologies.

Volatility and Speculative Interest

Silver prices are expected to remain highly volatile. Earlier in the year, prices surged towards USD 120 per ounce due to competition for limited physical supplies. BofA notes that trade negotiations between the U.S., Canada, and Mexico could further impact market supply, as these countries are major silver suppliers to the U.S.

Additionally, despite high prices, holdings in physically backed silver ETFs are declining, and speculative interest in long futures positions remains limited. This sensitivity to market sentiment could lead to sharp price fluctuations in the coming months.