Silver's 20% August Surge Sends Miners Soaring

Silver prices surged 20% in August 2026 to touch US$70/oz, driven by expanded US Treasury bond buybacks that amplified gains across Mexico-exposed producers, including Fresnillo, First Majestic Silver and Avino Silver. Fresnillo nearly tripled first-half profit despite falling Mexican output, while First Majestic raised 2026 guidance on record throughput at its Coahuila and Sonora mines. The rally coincides with a sixth consecutive year of global silver deficit, reinforcing Mexico's position as the world's largest producer amid rising industrial demand from solar, EV and AI infrastructure.

Silver jumped roughly 20% in August, touching US$70/oz on Aug. 21 before easing slightly, as the US Treasury's move to double long-bond buybacks fueled a broad rally in precious metals. 

The advance has already pushed silver past several banks' full-year average forecasts, even as producers' share prices moved even faster than the metal itself, and it has sharpened the spotlight on Mexico, the world's largest silver-producing nation, where earnings, output records and a deepening supply deficit are all now tied to the same price surge.

Silver ended July near US$57.59/oz, meaning the August move has been one of the metal's sharpest monthly runs in years. Because silver trades as both a monetary asset and an industrial input, it tends to move harder than gold when government bond markets reprice. With bullion already sitting at levels that looked aggressive just weeks earlier, attention is now turning to whether the rally can hold, and how much of Wall Street's bullish outlook is already priced in.

Mining equities amplified the gains well beyond the metal itself. Hecla Mining led the sector with a 47% August gain, more than double silver's own advance. Wheaton Precious Metals climbed 44%, while Coeur Mining, First Majestic Silver and Fortuna Mining each rose 42%, and Silvercorp Metals added 36%. 

The Global X Silver Miners ETF rose 35% and the junior-focused ETFMG Prime Junior Silver Miners ETF added 32%. Pan American Silver posted the group's weakest gain at 22%,  still ahead of the metal itself. That leverage cuts both ways: the same dynamic that boosts miners on the way up can magnify losses if bullion reverses.

Mexico's Exposure

Because Mexico produces more silver than any other country, the rally carries direct consequences for its mining sector and export earnings. Fresnillo, Mexico's largest precious-metals producer, nearly tripled first-half profit as gold and silver price gains offset an 11.4% drop in silver output and a 7.3% decline in gold output across its Mexican operations. Revenue rose 74.7% to US$3.38 billion, funding a raised interim dividend and financial flexibility that had already helped underwrite the company's January acquisition of Probe Gold, its first move outside Mexico. The results show how far rising prices can stretch even when production itself is falling.

First Majestic Silver, meanwhile, raised its 2026 production guidance for a second consecutive year after its four Mexican mines produced 3.8Moz of silver and 34,660oz of gold in the second quarter. Record throughput at La Encantada in Coahuila, where output jumped 65% year-on-year, and at Santa Elena in Sonora, which set its own milling record, offset weaker performances at San Dimas and Los Gatos, where labor disputes and a rockfall disrupted operations. Avino Silver, a smaller Mexico-focused producer, has flagged similarly wide margins: with an all-in sustaining cost of about US$24/oz and silver trading well above US$70, the company says it is evaluating a share buyback.

The price strength also arrives against a structural backdrop years in the making. The Silver Institute projects the global market will enter a sixth consecutive year of deficit in 2026, with the supply gap widening to 46.3Moz, as industrial demand from solar power, electric vehicles and AI infrastructure outpaces mine supply. Solar alone has grown from 11% of industrial silver demand in 2014 to 29% in 2024. 

Yet Mexican output has been sliding even as prices rise: declining production from key operations contributed to a 3% drop in North American mine supply in 2025, its lowest level in a decade, leaving the country with the most to gain from higher prices and the most exposed if elevated costs erode margins.

Where Forecasts Stand

Wall Street's targets remain widely dispersed, reflecting uncertainty over how far the rally can run. UBS sees silver at US$80 by year-end and J.P. Morgan projects an US$85 fourth-quarter high, though it also flags downside risk to US$50. Goldman Sachs forecasts a full-year average of US$85 to US$100, while Citigroup targets US$110 for the second half with a medium-term range of US$110 to US$150. CIBC and BNP Paribas see roughly US$105 and US$100, respectively. More conservative estimates include ING's US$74 fourth-quarter call, HSBC's US$75 full-year average and Commerzbank's US$67 year-end target, though Commerzbank keeps a longer-term bullish target of US$90.

Bank of America projects an US$85.93 full-year average with silver exceeding US$100 in the fourth quarter, and outlines a tail-risk scenario of US$135 to US$309 should the gold-to-silver ratio compress sharply, a scenario BMO Capital Markets echoes with a US$160 fourth-quarter bull case against a US$74.50 base forecast. TD Securities has the highest peak call at US$118, paired with the most bearish full-year average at US$44. Scotiabank forecasts a US$65 average, Royal Bank of Canada points to a recovery band near US$75 extending into 2027, and Bain Commodities sees an US$85 peak against a US$63.50 average.

At US$70/oz, silver has already exceeded several banks' baseline expectations, leaving the next leg of the rally dependent on whether investment demand and Mexico's ability to keep pace with it, can sustain prices in the increasingly crowded US$74 to US$100 forecast range.