UBS expects silver to benefit from gold’s supportive backdrop

UBS expects silver prices to appreciate strongly, tracking gold's supportive backdrop driven by ongoing fiscal concerns and long-term risks to the purchasing power of the U.S. dollar. According to UBS strategist Dominic Schnider, the gold-silver correlation remains near multi-year highs, with silver trading effectively as a higher-beta play on gold. UBS forecasts silver to reach $70 per ounce by December 2026, advancing further to $75 by mid-2027 and $80 by September 2027, compared to a spot price around $66.50. While solar application thrifting poses some demand headwinds, structural consumption from AI infrastructure, data centers, grid modernization, and electric vehicles is anticipated to offset these effects. Additionally, supply growth remains structurally constrained because silver is primarily mined as a byproduct. Despite near-term monetary policy uncertainty and potential Federal Reserve hawkishness, UBS views the medium-term balance of risks as strongly tilted toward higher prices, advising investors to accumulate exposure during market dips.