Outlook 2026 – Nothing new under the sun | Silver & silver miners

During 2025, silver rose from below USD 30 to above USD 80 per troy ounce – with a move beyond USD 100 during 2026 already forecast by several major banks. It doesn’t take many strong years for silver to reach the longer-term target of USD 300. As the only metal with a true dual demand – both as a monetary metal and a steadily increasing industrial demand – it continues to show its strength in the market. Silver conducts heat and electricity the best of all metals, making it truly indispensable in an increasingly electrified global economy. When the day comes that we approach USD 300, then we’ll set a new long-term target based on the global conditions prevailing at that time. This also ties in with our long-term goal for the gold price to reach USD 10,000.

This next major target corresponds to a gold-to-silver ratio (GSR) of 30:1. In our longest-term estimates, we see the ratio moving towards 10:1, although we have no specific timeframe assigned to that scenario.

Following an exceptional year, silver closed 2025 at USD 71.31, representing a gain of +146% in USD terms.

In our Outlook 2025, our stated objective was:

“We expect silver to break through several important levels, such as USD 31, USD 35 and USD 40 during 2025, in order to challenge its long-standing all-time high from 2011 at just under USD 50 per troy ounce, equivalent to a gain of +73%.”

Silver more than doubled this target and has since continued to move in a spectacular fashion, behaving exactly as one would expect in a strong bull market.

We have previously stated that silver is likely to exceed USD 100 during 2026. We also expect the gold-to-silver ratio to continue to decline. Our target GSR for 2026 is 45:1, which would imply reaching a gold price of USD 6,000 and a silver price of USD 133 during the year. This would represent +87% increase for silver in 2026, although anything above USD 100 (+40.2%) would still constitute a very strong year for silver.

Global debt continues to increase at a record pace. The US economy is financed through substantial budget deficits, leading to ever-rising debt levels while monetary expansion accelerates. President Trump’s economic approach is to “run it hot”, favouring strong stimulus, low interest rates and the use of quantitative easing to support growth. It would be politically unrealistic for the new Federal Reserve Chair to pursue a course contrary to the President’s wishes, particularly given how deliberately the appointment was made to support this vision. Nothing new under the sun.

Over the long term, the price of silver responds to the creation of fiat currency units in excess of genuine economic growth. It’s important to note that genuine economic growth isn’t the same as reported GDP growth, which today includes a large amount of activity that doesn’t meaningfully contribute to the economy. In simple terms, more money is being printed, while real economic growth keeps falling behind. This is one of the main reasons gold and silver prices continue to rise.

A factor that is unique to silver is that there aren’t any meaningful inventories available to draw upon. After several years of supply deficits relative to demand, the market is approaching a situation that could have a significant impact on price formation. A physical shortage has the potential to double the price of silver within a very short period. Demand for silver is also highly inelastic. No matter how much the price increases, it’s highly unlikely there will be any meaningful decline in usage. This is partly because silver’s properties are irreplaceable, and partly because silver typically represents only a small portion of the total cost of finished products. Even substantial price increases therefore tend to have limited impact on end-product pricing.

The market is also approaching a point where paper contracts on COMEX can no longer dictate the price of physical silver. This is evident in the delivery challenges seen in London and in repeated, orchestrated price suppressions. Paradoxically, these interventions strengthen the bullish case, as they further exacerbate physical shortages. The desperation becomes more apparent with each episode, and ultimately it may be these actions themselves that undermine the system.

Key fundamental drivers

• Continued growth in global debt, now approaching USD 350 trillion

• China continues to expand stimulus programmes, while Japan deploys record-scale stimulus

• Interest payments on government debt — now the largest single expense for the US — are financed through deficits and additional borrowing

• The US administration aims to recreate a 1950s-style economy through aggressive fiscal stimulus and a “run it hot” approach

• The global race towards zero interest rates continues; many countries are near 2%, with Switzerland already at 0%

• The new Federal Reserve will be compelled to cut rates aggressively in line with political priorities

• The US is likely to resume quantitative easing to suppress long-term yields

• Confidence in the US dollar continues to erode, and the debasement trade remains intact

• 2026 is shaping up to be a year characterised by both strong fiscal and monetary stimulus simultaneously

• As the bond market becomes increasingly difficult to navigate, we are seeing a rotation of capital toward gold. Gold is attractive due to its high return potential, virtually zero correlation with equity markets, and no counterparty risk.

• As the gold price rises, the silver price often follows shortly thereafter, typically with a significantly faster rate of increase.

Silver mining equities performed very strongly throughout 2025, in line with expectations. Despite this, valuations relative to current commodity prices are actually lower today than they were prior to last year’s rally.

The current situation:

If silver prices merely remain at current levels, or continue to rise, these price levels are still not fully reflected in the share prices of mining companies. This creates the potential for substantial upside in mining equities, potentially far exceeding the percentage change in the silver price itself.

As professional investors look for additional investment opportunities, mining equities stand out due to their historically low valuations. They also have a relatively low correlation with the broader equity market, at around 0.3, which makes them well suited to diversified portfolios. If institutional capital begins to rotate into the sector, it could drive strong and sustained gains over time. Early investors who benefit from rising prices may further reinforce this trend as more capital follows.

Most silver is mined as a by-product of other metals, such as gold, zinc, lead and copper. As a result, there are only a small number of companies that focus primarily on silver. These companies are the most likely to increase production during supply shortages and are therefore best placed to benefit from rising revenues.

Silver remains undervalued relative to gold, and as a result silver mining companies remain undervalued relative to gold miners. It is also worth noting that, despite recent gains, gold mining equities remain historically undervalued compared with broader equity markets such as the S&P 500.

Key factors supporting mining equities

• Silver prices well above production costs

• Continued expansion in operating margins

• Reduced levels of debt

• Several years of discipline regarding capital-intensive new projects

• Meaningful share buybacks, particularly attractive when conducted at low valuations and without leverage

• A trend towards higher dividends and more shareholder-friendly policies

• Elevated levels of merger and acquisition activity

There are several clear reasons to remain positive on silver mining equities. Valuations remain low despite strong performance in 2025, while profitability has improved significantly. Silver prices are well above production costs, and company balance sheets continue to strengthen. Together, these factors support the case for further re-rating. The sector is also relatively small and under-invested, which makes it especially sensitive to new capital inflows from both professional and private investors.

In this environment, a focused approach is especially appealing. For investors looking to capture upside in silver and silver mining equities, while managing risk in a structured way, a well-constructed portfolio is essential. This is the basis on which AuAg Silver Bullet has been created.

AuAg Silver Bullet is a fund that invests in a portfolio of 30–35 carefully selected silver mining companies.

The portfolio is built with a focus on liquidity, exposure to silver, mining jurisdictions and management quality. Careful weighting is used to create a portfolio that aims to be more efficient than traditional index-based approaches, such as those followed by the largest silver mining ETFs. This approach is designed to benefit from rising silver prices and a strengthening market for silver mining equities.

By increasing exposure to silver mining companies, investors can improve the overall return potential of their portfolios. In our Outlook 2026, which points to continued growth in the sector, AuAg Silver Bullet offers a way for investors to diversify their holdings.

Important information

This material is marketing communication. The information does not constitute investment advice or a personal recommendation. Investment decisions should be based on the fund’s information brochure and fact sheet, as well as your own considerations.

Investments involve risk. Past performance is not a guarantee of future returns. The money invested in the fund may both increase and decrease in value, and it is not certain that you will recover the entire amount invested.

Before making an investment decision, you should review the fund's information brochure and fact sheet, available at:

https://www.auagfunds.com/investment-solutions/auag-silver-bullet#documents