Metals Focus and the Silver Institute forecast a sixth straight annual silver deficit, but fund selling releases more metal than the shortfall needs. Counting it, the market shows a small surplus. Fund buying has returned since June, and whether it lasts is the main thing to watch.
Metals Focus and the Silver Institute forecast a sixth deficit in a row of 35 million ounces in their interim review, published November 12. Silver funds sit outside that figure, however, and they are expected to release 45 million ounces over the year, more than the deficit itself. Once fund selling is counted, the market shows a small surplus of 10 million ounces.
On the morning of November 13, silver traded near $49.70 an ounce, about 31% below its 2025 close. This week a hotter US inflation report pushed the dollar to a 19-month high, and precious metals fell with it.
Funds flipped the supply picture
In April, the survey expected funds to add 30 million ounces this year. The deficit was 46.3 million ounces, so the second balance, which adds the fund line, showed a shortfall of 76.3 million ounces.
The funds went the other way. By November 3, global fund holdings were down 55 million ounces since the start of the year. Put together, that second balance has gone from a shortfall of 76.3 million ounces to a surplus of 10 million ounces.
Coin and bar buyers also pulled back. The review now expects coin and bar demand of 215 million ounces this year, down 2%, and US retail investment is expected to reach its lowest level since 2010.
Funds are buying again, unevenly
The selling was not one-way. The review says fund holdings have recovered 24 million ounces since the end of June, though buying has been uneven and higher bond yields have held the recovery back.
The two largest physical silver funds are both still below where they started the year. The iShares Silver Trust holds about 24.42 million ounces less than at the end of 2025, while the Sprott Physical Silver Trust holds about 6.1 million ounces less.
If fund buying holds up, funds stop releasing metal to the physical market, and the deficit would again have to be met from stockpiles. If rising yields keep investors away, funds can keep selling. The next readings that matter are fund holdings into year end and the next World Silver Survey, usually published in April.
Source: Investing.com
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