UBS Sees Silver Shining Bright: Is Now the Time to Invest?

Analysts recommend staying long on silver with promising price targets into 2026

Silver Consolidation Presents Buying Opportunity

UBS has advised investors to maintain long positions in silver, suggesting that recent price consolidation around $38 per ounce presents a strategic entry point for those looking to gain exposure to the metal.

According to the investment bank, silver remains poised for further upside—particularly if the US Federal Reserve resumes interest rate cuts. Their forecasts predict silver could reach:

• $42/oz by Q4 2025 and Q1 2026
• $44/oz by Q2 and Q3 2026

UBS also identified pullbacks below $36/oz as a favourable buying opportunity for long-term investors.

The Case for Silver: Industrial & Monetary Demand

The bullish outlook for silver is driven by multiple factors:

• Monetary Policy Tailwinds: Expectations that the Fed will shift rates to neutral
• Weaker US Dollar: Projected to soften in the mid-to-high single-digit range
• Growing Industrial Demand: Silver is critical in electronics, solar panels, and electric vehicles

Strategists Dominic Schnider and Wayne Gordon noted that while near-term growth concerns may cap upside, the long-term demand story remains robust.

“We favour a long position in silver and would add to positions on pullbacks below $36/oz,” the UBS team stated.

Silver vs Gold: The Ratio That Matters

Silver has historically trailed gold in performance, but that gap may be narrowing.

• The current gold-silver ratio stands at 89.7:1
• UBS expects this could compress to 75–80:1 if economic growth picks up
• With gold projected to reach $3,700/oz, a ratio of 80:1 would imply silver prices in the $45–50/oz range

While UBS has not officially forecasted silver to reach these levels, their long-term target of $44/oz already hints at significant upside.

Compared with Other Precious Metals:

Technical Levels and Investment Strategy

UBS analysts also point to technical support between $35.30 and $36.00, suggesting this as a potential price floor.

They highlight that:

• Volatility is falling (22.5%), but selling volatility strategies remain attractive
• Flexibility is key: “Be ready to add at lower levels and stay invested long term”

Conclusion: Is Silver the Smart Precious Metal Play?

While gold tends to grab the headlines, silver may be the underdog worth watching. It has strong industrial demand, benefits from similar macroeconomic conditions that favour gold, and offers lower-cost exposure to precious metals.

UBS's projections signal steady upside through to 2026, with room for even more aggressive gains if the gold-silver ratio narrows.

Investors looking for diversification or a more affordable hedge may find silver the smarter long-term bet—particularly with prices still below $40/oz.

Sources: (Investing.com, Fool.com)