June 30, 2026
Commentary
The Ninepoint Silver Bullion Fund returned -20.76% (Series F CAD) in Q2 2026, bringing YTD performance to -15.87%.
NINEPOINT SILVER BULLION FUND - COMPOUNDED RETURNS¹ (%) AS OF JUNE 30, 2026 (SERIES F NPP326) | INCEPTION DATE: MAY 10, 2011
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
15YR |
INCEPTION |
|
FUND |
-20.00% |
-15.87% |
-20.76% |
-15.87% |
66.72% |
38.38% |
19.14% |
11.29% |
4.41% |
3.62% |
SILVER SPOT (CAD) |
19.94% |
-15.51% |
-20.52% |
-15.51% |
69.02% |
40.17% |
20.74% |
13.13% |
6.25% |
5.58% |
Following an extraordinary run to all-time highs in January, silver spent the second quarter working through a significant repricing as monetary policy expectations shifted and industrial demand assumptions were tested. The result was a volatile but ultimately healthy consolidation that reset valuations without disturbing the metal's core structural deficit.
Price Performance: Volatility With a Purpose
Spot silver fell from its closing price of $75.36/oz on April 1st to $58.59/oz on June 30th, a decline of more than 22% over the quarter — a significant retracement from the all-time high of $121.62 hit on January 29. The path lower was anything but linear. In mid-April, hopes for a US-Iran peace deal briefly fueled expectations of an earlier Fed rate cut, sending silver back above $80, before the stalemate re-emerged and the Fed's decision to hold rates steady pulled silver down to a monthly low of $71.86 on April 29th. Silver then consolidated between roughly $70 and $80 through much of the quarter, before surging 6% on May 11th following a US-China tariff truce, only to pull back again on hotter-than-expected April CPI data that pushed Fed cut expectations out to September at the earliest.
One of the more notable technical developments came in the gold-silver ratio: it compressed from roughly 62:1 to below 55:1 in a single week in May — one of the fastest moves in years — signaling that the move was being driven by an industrial demand repricing rather than a shift in safe-haven positioning.
Key Market Drivers
1. Fed Policy Repricing
As with gold, silver's Q2 direction was dominated by the shift in Fed expectations under the new chair. The turning point came with a fundamental reversal in expectations for Fed policy; as hopes for an early end to hostilities in the Middle East faded and the Fed held rates steady, silver gave back its April gains. As a dual-purpose metal, silver's performance was shaped both by monetary policy and its industrial uses in electronics, automotive applications, and renewables — which makes it move more sharply than gold in either direction.
2. Industrial Demand: A More Nuanced Picture Than Headlines Suggest
The World Silver Survey projects industrial consumption will fall roughly 3% in 2026 to around 640 million ounces, largely because solar panel manufacturers have responded to higher prices with thrifting and substitution strategies. However, this doesn't tell the whole story. Demand tied to AI electronics, data centers, and EV charging infrastructure continues to grow, providing a structural offset to solar's retreat. AI data centers, power transmission equipment, and auto electronics all helped offset the decline in solar-related demand through the year.
3. The Structural Deficit Remains Intact
The Silver Institute's World Silver Survey 2026 projects a 46.3 million ounce deficit for 2026, wider than the 40.3 million ounce gap recorded in 2025, with the cumulative drawdown from above-ground stockpiles reaching 762.1 million ounces since 2021. This marks silver's sixth consecutive year of a structural supply deficit, and importantly, this dynamic is a multi-year phenomenon that doesn't reverse based on a single quarter's price action — the market has been drawing down existing inventories to cover the gap, and those stocks are limited.
4. Physical Investment Demand Stayed Resilient
Global silver coin and bar demand rose 14% in 2025, with physical investment in India alone surging 33%. This continued strength in physical accumulation, even as prices corrected, echoes the pattern seen in gold and suggests long-term holders largely stayed the course through the volatility.
Outlook
The Q2 correction resets silver's price to a level more consistent with prevailing rate expectations, but it's worth stepping back to consider what has — and hasn't — changed in the structural picture.
The supply-demand imbalance is not a near-term phenomenon. Six consecutive years of deficits, a widening shortfall projected for 2026, and a shrinking pool of above-ground inventory to draw from all point to a market that remains fundamentally undersupplied. Unlike gold, where price swings are driven primarily by shifts in investment and reserve-management flows, silver's deficit is rooted in the physical mismatch between mine supply — which responds to price signals over years, not months — and demand that spans multiple growing end markets simultaneously.
Silver's demand base is diversifying in a way that reduces its reliance on any single driver. The narrative earlier in the cycle centered heavily on solar; that story is evolving as higher prices induce some thrifting and substitution in photovoltaic manufacturing. But rather than undermining the demand case, this has been offset by emerging pools of demand from AI data center infrastructure, EV electrification, and grid modernization — sectors with less price sensitivity than solar manufacturing and long investment horizons of their own. A metal drawing demand from an increasingly broad set of secular growth trends is, all else equal, a more resilient one than it was a year or two ago.
Volatility is a feature of silver, not a bug. Silver's dual identity as both a monetary and industrial metal means it will typically overshoot gold's moves in both directions — as it did on the way up in 2025 and January 2026, and again on the way down through Q2. This can be uncomfortable in the short run, but for investors with a multi-year horizon, it has historically been the mechanism through which silver ultimately outperforms during precious metals bull cycles, once the broader monetary backdrop turns supportive again.
The path forward likely tracks the Fed and the broader gold complex. Because gold and silver remain closely correlated, the near-term path for silver will likely continue to hinge on the same drivers reshaping gold: the trajectory of Fed policy, inflation data, and the dollar. A resumption of rate-cut expectations, or clarity on the geopolitical situation in the Middle East, could quickly reinvigorate the monetary side of silver's demand equation and compress the gold-silver ratio further — as briefly seen in May.
Taken together, we view the Q2 pullback as a repricing of near-term rate expectations rather than a repudiation of silver's structural bull case. The deficit persists, the buyer base continues to broaden, and the metal's historical tendency to move sharply in both directions cuts both ways — which is exactly why a long-term allocation approach, rather than a reaction to any single quarter, remains the more productive way to think about silver as a holding.
Sincerely,
Ninepoint Partners
Sources: Silver Institute, Bloomberg, JP Morgan, LBMA
All figures in USD unless stated otherwise.