UBS strategists expect silver to remain a volatile asset in the months ahead but see little room for significant gains over the next year, forecasting a stabilization modestly above current levels following a recent surge and significant geopolitically prompted price swings.
In a client note, strategists Dominic Schnider and Wayne Gordon said: "Silver prices, like gold, have been volatile during the U.S.-Israel conflict with Iran and Iran’s retaliation against neighboring countries." The analysts cited the metal's price action as evidence of limited near-term hedge value.
Market snapshot
Spot silver was trading at about $84.2 per ounce as of 11:08 GMT on Thursday. The metal briefly neared $100 per ounce amid the escalation in the Middle East before retreating to below $85, underscoring UBS's observation of silver's "limited value as a long-term hedge."
Volatility and options signals
UBS highlighted unusually high realized volatility over the past one to three months, measuring roughly 100%. Options markets, the bank noted, imply forward volatility in the neighborhood of 70% to 80%. The strategists wrote that these volatility metrics are "comparable to or exceeding that of Bitcoin," a comparison they used to illustrate the elevated uncertainty surrounding silver's valuation.
Price outlook and timing
From a price-path perspective, UBS expects silver to settle around $85 per ounce in the near term. The bank maintained its broader medium-term view, projecting a peak close to $100 per ounce in mid-2026, followed by a decline back toward $85 by March 2027.
Investor positioning and market demand
Despite the sharp rally, UBS's strategists pointed to positioning data suggesting waning investor enthusiasm for silver. They wrote: "Fewer ETF long positions and lower Comex open interest indicate silver is not preferred in uncertain times." The note also referenced historical patterns, adding: "Even gold typically experiences short-lived price effects during such events, as seen during the first Gulf War," Schnider and Gordon added.
On fundamentals, UBS still estimates the market is undersupplied, with a deficit of about 300 million ounces. Nonetheless, the bank cautioned that downside risks persist if industrial or jewelry demand weakens, particularly after a rally that has pushed silver prices to nearly three times their level since early 2025.
Near-term returns and investor takeaways
While UBS described the outlook for mid-2026 as constructive, the strategists concluded that returns over the coming 12 months are likely to be muted. "Over the next 12 months, projected returns are less attractive based on our long-term forecast of $85/oz," they wrote, signaling a less compelling risk-reward profile for near-term investors.
Key takeaways
- UBS expects silver to stabilize around $85/oz in the near term, with a projected mid-2026 peak near $100/oz and a reversion toward $85 by March 2027.
- Realized volatility recently has been about 100%, with options-implied forward volatility roughly 70%-80%, levels UBS says are comparable to or exceeding Bitcoin's volatility.
- Investor positioning shows fewer ETF longs and reduced Comex open interest, suggesting reduced preference for silver amid uncertainty.