UBS expects silver to show periods of strong outperformance against gold over the next year. The bank says this could happen as supply tightens, investor interest increases, and macroeconomic uncertainty remains elevated.
UBS does not predict a long, sustained period of silver leadership. However, it argues that the market is becoming more vulnerable to sharp upward moves. This risk grows as inventories shrink and gold continues to trend toward new highs.
Strategists Joni Teves and Bhanu Baweja maintain a bullish view on silver. They base this largely on their expectation that gold will keep setting new records in the coming year. Silver’s high-beta relationship with gold puts it in a good position to outperform when money flows into the broader precious-metals market.
Silver’s lower price also makes it accessible to a wider pool of investors. Thin liquidity can amplify sentiment shifts and create faster price swings.
UBS has raised its long-term real price forecast for silver to $35. This implies a nominal price near $40 over the longer horizon. The bank now targets $53 for year-end 2025 and keeps a $55 forecast for 2026, with the possibility that silver could “test $60” in the first half of that year.
The strategists say risks are tilted to the upside, especially if liquidity squeezes return.
They highlight persistent structural deficits in the silver market. Physical shortages have continued since 2021, driven by strong industrial demand in electronics and solar applications. Supply has also been limited, as most silver is produced as a byproduct of other mining operations.
These conditions leave the market exposed to bursts of investment demand. Tight inventories, metal shifting between regions, and an increasing share of silver held in non-deliverable forms can all intensify short-term disruptions. When demand spikes, these factors can trigger rapid price moves.
Still, UBS does not expect silver to consistently outperform gold. Gold maintains long-term stability because of its role as a reserve asset and the ongoing accumulation by central banks.
More than half of silver’s demand comes from industrial use. This makes it more sensitive to economic cycles and periods of risk aversion. Gold, by contrast, benefits from central-bank buying and is better insulated from downturns.
UBS adds that gold remains under-owned relative to total assets. The bank believes there is room for allocations to increase.
