Goldman Sachs Warns: Extreme Silver Price Volatility to Persist in 2026

Silver has always attracted the attention of global investors and analysts. In 2025, silver saw a surge of 147%, which has prompted many to question the direction of silver prices in 2026. Will the bullish trend continue, or will market volatility restrain the rise of this precious metal? Recent reports, including warnings from Goldman Sachs, suggest that extreme price volatility is likely to persist in 2026. This blog post will delve into the factors contributing to this volatility, provide insights into potential price movements, and offer advice for investors navigating this dynamic market.

Understanding the 2025 Silver Surge

Silver experienced a remarkable upswing in 2025, capturing the attention of both seasoned precious metals investors and newcomers seeking alternatives to volatile equity markets. The metal entered 2025 at roughly $30 per ounce and surged to about $70 per troy ounce. This rapid acceleration reflects more than just investor enthusiasm. A combination of inflation pressures, supply constraints, geopolitical uncertainty, and rising industrial demand all contributed to silver’s sharp climb. At the same time, the Federal Reserve’s late-2025 rate cuts helped fuel broader interest in hard assets, giving silver another tailwind.

Goldman Sachs’ Warning: Volatility Ahead

Goldman Sachs expects extreme price swings in silver to persist following the metal’s historic 138% gain in 2025, citing thin London inventories as a key factor amplifying market moves. Persistently thin inventories mean silver prices are likely to remain highly sensitive to flows, increasing both upside potential and downside risk.

Key Factors Contributing to Volatility

Thin London Inventories: Silver inventories in London, where the global benchmark price is set, are unusually low after large volumes of the metal were moved into U.S. vaults last year on concerns that the Trump administration could impose trade tariffs, as well as investor inflows tied to safe-haven buying, rate cut expectations from the U.S. Federal Reserve, and asset diversification.
Pre-positioning of Metal: Speculation around potential U.S. trade policies prompted pre-positioning of metal into the United States throughout 2025, despite silver’s exemption from tariffs in April 2025, which drew inventory out of London and reduced available supply.
China’s Export Controls: China’s new export restrictions, which now require official approval for silver shipments, have added to the volatility, which Goldman said could fragment the global silver market, reducing liquidity while amplifying price swings.

Silver Price Forecasts for 2026: A Range of Possibilities

Silver price forecasts in 2026 are highly varied, but most analysts agree that breaking substantially through $50 will be the next key barrier for silver.

Bullish Scenario: A combination of strong fundamentals, high industrial demand, and positive market sentiment could push silver prices to $85–$90 per ounce.
Moderate Scenario: Projects prices in the $70–$80 range, consistent with stable demand trends and ongoing supply deficits.
Bearish Scenario: Remains possible if the US dollar strengthens or investors shift their focus to high-yield assets, causing silver prices to drop to the $60–$70 per ounce range.

Factors Influencing Silver Prices in 2026

Several factors are expected to influence silver prices in 2026:

US Dollar Strength: As mentioned above, the strength of the US dollar will be a key driver for the silver price in 2026. The US dollar index is down over 8% so far in 2025. Combined with a gradual move towards lower interest rates from the Federal Reserve, and the ongoing de-dollarisation globally, and the US dollar has weakened. This is expected to continue in 2026, and should continue to support the silver price in 2026.
Industrial Demand: Industrial demand is also expected to continue to rise, with the explosive growth of the AI sector believed to be a major new source of demand on top of the already growing green energy sector.
Supply Deficits: Supply has so far failed to grow to meet this demand, and shortages have been reported even in major bullion markets such as London, causing lease rates in silver to spike.
Geopolitical Tensions: Escalation in the Middle East or any new conflicts appearing could still have an effect on the silver price. The election in the US could also seem some dollar volatility in either direction.

Investment Strategies for a Volatile Silver Market

Given the anticipated volatility, investors should consider the following strategies:

Diversification: Silver should be viewed more as a portfolio diversifier and not a short-term directional bet.
Long-Term Perspective: Silver is best achieved by making a long-term investment in the metal.
Monitor Key Metrics: Investors should watch the three metrics that influence silver prices: real interest rates, global manufacturing activity, and the pace of renewable energy expansion.
Stay Informed: Keeping up to date with the latest market trends and news is essential for making informed investment decisions.

Conclusion

The silver market in 2026 is poised to be dynamic, with potential for both significant gains and sharp corrections. Goldman Sachs’ warning about extreme price volatility highlights the importance of understanding the factors at play and adopting appropriate investment strategies. By staying informed and considering a long-term perspective, investors can navigate the silver market and potentially benefit from its unique opportunities.

Is silver a strategic metal? The answer is yes, and with careful planning and awareness, investors can potentially leverage silver’s unique position in the market.