In a recent episode of the Money Metals podcast, host
Michael Maharrey
sat down with
Philip Newman
, Managing Director and founding partner of Metals Focus, to unpack the forces shaping gold and silver markets in 2026.
Drawing on
Metals Focus Ltd
’s widely respected data, which is used by organizations such as the Silver Institute and
World Gold Council
, Newman offered a detailed look at how geopolitics, monetary policy, and industrial demand are interacting in real time.
The discussion began with the Iran–U.S.–Israel conflict, which has introduced significant volatility across global markets. While many expected a strong safe-haven surge in gold and silver, Newman explained that the metals have not responded as dramatically as some anticipated.
A key reason is the sharp rally leading into late January 2026, when both metals reached record highs before correcting. That pullback left some investors cautious about re-entering the market.
More importantly, the dominant influence has shifted toward Federal Reserve expectations. Before the conflict, markets were pricing in up to two rate cuts in 2026. After hostilities began, expectations quickly changed, at times even suggesting the possibility of a rate increase.
(Interview Starts Around 8:21 Mark)
Inflation Outlook, Fed Policy, and Global Economic Uncertainty
Looking beyond the immediate conflict, Newman described the broader environment as highly uncertain. Metals Focus built its 2026 forecasts on the assumption of a short-lived war, but a prolonged conflict could shift the outlook. Rising energy prices have already contributed to inflation pressures, including a reported 21 percent increase in gasoline prices, which could push the Federal Reserve toward tighter policy.
At the same time, conflicting pressures complicate the situation. High levels of government and corporate debt make sustained higher interest rates difficult. Political dynamics also play a role.
Newman noted that pressure on the Federal Reserve, particularly from former President Donald Trump, could raise concerns about central bank independence. If markets begin to doubt that independence, the U.S. dollar could weaken, which would support gold and silver prices.
Geopolitical risks extend well beyond the Middle East. Ongoing tensions involving Russia, Ukraine, NATO, and East Asia continue to add instability. Even if the current conflict ends quickly, other factors such as tariffs, the November 2026 U.S. midterm elections, and shifting political strategies could sustain volatility across global markets.
Retail vs Institutional Investors in Gold and Silver Markets
Another important theme is the divergence between retail and institutional investors. Maharrey pointed out that gold often rises during Asian and European trading hours, then declines when U.S. markets open. This observation aligns with ETF data showing continued inflows into gold funds in Asia during March.
Newman confirmed that retail demand has remained strong, particularly in coins and bars across multiple regions.
In contrast, institutional investors have become more cautious. Increased price volatility and risk management constraints have limited their participation. The correction in late January forced many institutions to scale back exposure, and higher volatility now allows them to achieve returns with fewer trades.
As Newman explained, “The volatility is so much greater that a single trade can perhaps generate a return… compared to six months ago.”
He also noted that much of silver’s rally from mid-October 2025 through January 2026 was driven by retail activity and day trading, especially on exchanges such as the Shanghai Futures Exchange and the CME. This highlights how different segments of the market are reacting in distinct ways to current conditions.
Silver Supply Deficit and Long-Term Market Trends
Newman also discussed findings from the latest World Silver Survey, which includes final data for 2025 and forecasts for 2026. While the 2025 deficit was relatively small, he emphasized that the cumulative deficit over multiple years is far more important.
“What’s more relevant is the ongoing deficit in the marketplace,” he said.
Historical data support this view.
In 2022, the silver market recorded a deficit exceeding 250 million ounces, yet prices averaged below $22 per ounce.
In 2023, a 200 million ounce deficit corresponded with an average price just above $23. These figures show that annual deficits do not directly determine price movements.
Instead, the ongoing drawdown of above-ground stocks gradually tightens the market.
By 2026, cumulative deficits over several years are approaching the equivalent of an entire year of global mine production. This marks a sharp reversal from the 2010 to 2020 period, when silver stocks increased by more than 200 million ounces. The shift illustrates how quickly the supply picture has changed.
Industrial Silver Demand, Solar Thrifting, and AI Growth
Rising silver prices have led to increased efforts to reduce usage, particularly in the solar sector. Newman explained that manufacturers are pursuing thrift strategies because even brief price spikes create concern about future costs.
Technological changes are already reducing silver demand in photovoltaics. In heterojunction technology, silver usage has declined by about 85 percent since 2021 due to the adoption of silver-coated copper. This dramatic shift highlights how quickly the industry can adapt when prices rise.
As a result, photovoltaic demand is expected to fall from about 198 million ounces in 2024 to roughly 151 million ounces in 2026, a decline of around 19 percent. Despite this drop, overall industrial demand remains resilient.
Growth in other sectors is helping offset the decline. The expansion of artificial intelligence infrastructure, especially data centers, is driving strong demand with little evidence of substitution.
Newman noted that “there is an urgency to get these data centers installed… they don’t want to reduce the silver content.”
Additional support comes from electric vehicles, satellite technology, power distribution systems, and defense applications. Even with reduced solar demand, total industrial silver demand is expected to fall by only about 3 percent and remain above 600 million ounces.
Precious Metals Market Outlook and Investor Takeaways
The conversation makes clear that precious metals markets in 2026 are being shaped by a complex mix of factors. Geopolitical tensions, shifting expectations for monetary policy, technological changes, and structural supply deficits are all influencing price behavior.
Short-term movements are increasingly tied to Federal Reserve policy and interest rate expectations.
At the same time, long-term fundamentals such as tightening supply and steady industrial demand continue to provide underlying support. Regional differences in investor behavior and the growing role of retail participants add further complexity.
As Newman emphasized during the discussion, “The key takeaway is uncertainty.”
Understanding precious metals markets now requires attention to both immediate macroeconomic signals and the deeper structural trends that are unfolding over time.
For those who want to follow Philip Newman’s work, Metals Focus publishes extensive research and market analysis on its website.
Investors can also stay connected with Mike Maharrey and the team at Money Metals through the Money Metals podcast and the company’s ongoing market commentary and analysis.
Originally Published on Money Metals.