Silver Prices Set to Soar: UBS Analysts Predict $36-38 Target Range
In a recent note dated Monday, analysts at UBS have highlighted the potential for silver prices to continue their upward trajectory in the coming months. Factors such as a weaker U.S. dollar, improved sentiment in financial markets, and record-high gold prices have all contributed to a modest rebound in silver prices.
Long-term investors are advised to consider increasing their exposure to silver, with a target price range of $36-38 per ounce. Despite the focus on U.S. macroeconomic developments, silver offers more than just a play on economic news, according to UBS analysts.
Optimism about industrial demand for silver remains high, with expectations of a 10% year-on-year expansion driven by secular demand drivers like the global energy transition. China's renewed demand for silver, coupled with expectations of positive net imports in the upcoming trade data, is also seen as a positive factor for silver prices.
UBS analysts also point to the potential for increased demand for silver exchange-traded funds (ETFs) as U.S. economic outperformance fades. A recovery in manufacturing sentiment in the coming months could further boost silver demand.
Overall, UBS maintains a positive outlook on silver and advises investors to consider long exposure to the metal. Selling price downside risks to generate additional yield is also suggested, given the favorable demand dynamics and supportive macroeconomic backdrop.
In conclusion, the outlook for silver prices is bullish, with potential for further gains driven by a combination of factors such as weakening U.S. dollar, strong industrial demand, and renewed appetite from China. Long-term investors may benefit from increasing their exposure to silver and exploring options for generating additional yield.