Analyst sees Silver near $70; 2026 outlook positive for long-term investors

Silver needs to hold above $70 to make a fresh attempt at a new high. An increase in margins is serving as a bearish catalyst for the metal

Silver: China’s silver export restrictions roil the market 

Performance:

Spot silver surged 148 per cent to $71.66 in 2025 as the year turned out to be the best year for the metal since 1979, in which it surged 434 per cent amid the Hunt Brothers' attempts to dominate the silver market.

 

The grey metal has become extremely volatile in the last few days of 2025 as China's silver export restrictions, speculative frenzy, margin hikes and thin liquidity lead to huge volatility resulting in stomach-churning 10 per cent -12 per cent intraday moves.

 

The metal rallied 27 per cent in December. At one point in time, it was up by 49 per cent in the month when it hit a fresh all-time high of $84 on December 29 before cooling off on huge margin hikes by the CME.

 

Silver ETF and COMEX Inventory:

Total known global silver ETF holdings stood at 863.39 MOz, up 21 per cent year-to-date (Y-T-D), as of December 31. ETF Holdings are down nearly 1 per cent from the cycle peak of 871 MOz seen on December 23, but still near the highest level since January 2022.

  As of December 31, registered COMEX silver inventory stood at 128.163 MOz, the lowest since February 2025, while eligible COMEX silver inventory at 321 MOz is down over 6 per cent from its record high of 342 MOz noted on October 3, 2025.

China moves to restrict silver exports:

Effective January 1, 2026, China's Ministry of Commerce will implement a 2-year special government licence for silver exports. The new system will replace the quota system that has been in place since 2000.

  As per the new directives, Chinese companies need to prove their export records from 2022 to 2024. They must have an annual capacity of more than 80 tons and $30 million credit line. December review shows that 44 firms qualified for exports in the 2026-2027 period.

  China's move is being seen as a strategic manoeuvre to secure physical silver supply to meet its industrial demand at a time when the US also looks to secure supplies to meet strong demand from photovoltaic, AI, and EVs.  ALSO READ | Here's how to trade Gold on January 02; Check support, target and more

Impact and implications of China’s silver export restrictions:

China's restrictions have roiled the silver market as China’s silver prices traded at a premium of $5 to $10 to COMEX and LBMA silver prices. Silver surged to a record high of $84 on supply worries. 

  Silver export restrictions will further tighten the already tight market as the metal is in its fifth straight year of deficit, ~200 Moz in 2025 (including ETFs), which is expected to continue.

  China exported more than 4,600 tons of silver in the January-November period in 2025. China's silver export restriction will affect 7-10 per cent of global silver supply. If China follows its restriction plan strictly, it will eventually tilt the premium balance in favour of the international silver prices.

  The US Bureau of Industry and Security will determine in January-February whether silver is a threat to national security.

  It is to be noted that the U.S. has a 64 per cent import reliance in the case of silver. If the Trump Administration imposes tariffs on silver imports, it would significantly tighten the global markets due to inventory dislocation, as seen in the case of copper.

Margin hikes:

Parabolic moves in the silver prices prompted the CME to hike margins on gold and silver for the second time in a week.

  Margins have been hiked on platinum, platinum and gold also.

  Shanghai Gold Exchange increased the silver margin to 20 per cent.

  There could be further hikes in margins.  

Outlook:

As China is on holiday from January 1 to January 5, a crucial benchmark price will be missing.

  The role of speculative element in the moves in the last few days is not ruled out as palladium and platinum witnessed intraday swings in the tune of 8-20 per cent.

  The metal needs to hold above $70 to make a fresh attempt at a new high. An increase in margins is serving as a bearish catalyst for the metal.

  As the grey metal presently is 67 per cent above its 200-DMA moving average, in the very short term, it may consolidate its gains.

  Risk of further margin increase may keep the upside contained in the very short term. 

  Dip buying with a strict stoploss is the preferred strategy.

  If $70 support is breached, the metal may fall to mid $60s. Resistance is at $$76/$78/$85.

  Unless more clarity emerges on China’s silver export restrictions, the metal may trade with a slightly bearish tilt due to margin hikes and index rebalancing dynamics.

  However, we expect the metal to do well in 2026 and the coming years also. It is advisable to accumulate it at lower levels with an investment horizon of 3-5 years. 

  (Disclaimer: This article is by Praveen Singh, head currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)