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Investing.com -- UBS urged investors to maintain long positions in silver and pointed to favorable entry levels after the metal’s recent consolidation.
Silver prices have recently consolidated around $38 per ounce, but UBS expects the metal to advance toward $42–44 in the coming quarters, provided the Federal Reserve resumes its rate-cutting cycle.
The bank introduced its third-quarter 2026 target with this note, rolling over forecasts and making incremental upward adjustments further out.
Its projections for the fourth quarter of 2025 and the first quarter of 2026 remain at $42, while forecasts for the second and third quarters of 2026 have been raised to $44.
“We favor a long position in silver and would add to positions on pullbacks below $36/oz,” strategists Dominic Schnider and Wayne Gordon wrote.
The team notes that drivers behind the bullish case are unchanged. Expectations of the Fed gradually shifting rates to neutral, a softer U.S. dollar in the mid-to-high single-digit range, and eventually stronger economic growth supporting industrial demand should underpin the market.
However, the strategists cautioned that near-term growth concerns may limit upside, given that more than half of silver demand comes from industrial applications.
Historically, the gold-silver ratio at 89.7x could narrow to 75–80x if growth accelerates, UBS said.
With its gold forecast at $3,700, this would imply silver prices in the $45–50 range, though the bank considers it premature to reflect such levels in official forecasts. Its long-term target of $44 already points in that direction.
The strategists also see technical support for silver in the $35.3–36 range, with volatility-selling strategies remaining viable despite option volatility dropping to 22.5%.
“Maintaining the flexibility to be long at lower levels over a longer horizon is essential,” they said.