According to analysts at UBS, silver prices are expected to continue rising in the coming months due to favorable macroeconomic factors and strong demand fundamentals. Factors such as a weaker U.S. dollar, improving market sentiment, and record-high gold prices have all contributed to a recent uptick in silver prices.
UBS recommends that long-term investors consider increasing their exposure to silver, with a target price range of $36-38 per ounce. The recent weakening of the U.S. dollar and a shift towards a more risk-on environment among investors have created a supportive backdrop for silver.
Despite concerns about U.S. macroeconomic developments, UBS analysts believe that silver offers more than just a play on U.S. economic news. They remain optimistic about industrial demand for silver, with expectations of a 10% year-over-year expansion driven by long-term secular trends such as the global energy transition.
China’s renewed demand for silver, highlighted by positive net imports in recent months, is also expected to support global silver prices. UBS anticipates continued strong silver imports into China, driven by falling yields and expectations of weakness in the Chinese yuan.
UBS also points to the potential for increased demand for silver exchange-traded funds (ETFs) and a recovery in manufacturing sentiment as factors that could further boost silver prices in the future. Overall, UBS maintains a positive outlook on silver and advises long-term investors to consider exposure to the metal.
Investors may also explore selling price downside risks to generate additional yield, given the favorable demand dynamics and macroeconomic backdrop.