UBS continues to be bullish: Silver has a lot of room to rise!
UBS analysts predict that the price of silver will continue to rise in the coming months, and they recommend long-term investors to increase their investment in silver. Influenced by factors such as the weakening US dollar, improved financial market sentiment, and the recovery of demand in China, the silver price is expected to break through $36-38 per ounce. Additionally, industrial demand for silver is expected to grow, especially due to the global energy transition requirements, leading analysts to maintain an optimistic outlook on the long-term trend
In a report released on Monday, UBS analysts stated that, driven by favorable macroeconomic factors and strong demand fundamentals, silver prices are expected to further rise in the coming months.
The weakening US dollar, improved financial market sentiment, and record high gold prices have all contributed to a recent moderate rebound in silver prices. UBS analysts recommend long-term investors to consider increasing exposure to silver, with a target price range of $36-38 per ounce.
The recent weakness in the US dollar and investors' shift towards a more risk-on investment environment have provided support for silver.
While most of the market's attention is focused on the potential developments in the US macroeconomy and the possibility of interest rate cuts, UBS analysts believe that silver will not only react to these factors.
Despite recent soft manufacturing data in developed economies, UBS remains optimistic about industrial demand for silver. Analysts stated, "In our base case scenario, industrial demand for silver is expected to increase by 50 million ounces this year, or nearly 10% year-on-year, driven by long-term demand drivers (such as energy transition)."
UBS expects this demand growth to be a long-term trend, including global energy transition, as applications like solar panels and electrical components require more silver.
Another favorable factor for silver prices is the recovery in Chinese silver demand. UBS pointed out that China has shifted to being a net importer of silver, with net imports reaching 5 million ounces in July, higher than the 3.2 million ounces in June. UBS expects strong Chinese silver imports to continue, further supporting global silver prices.
UBS analysts also emphasized that as the US economy outperforms expectations, demand for silver exchange-traded funds (ETFs) from investors may increase.
Furthermore, UBS anticipates a recovery in manufacturing sentiment in the coming months, which could further boost silver demand.
Given these factors, UBS maintains a positive outlook on silver and advises long-term investors to consider allocating to this metal.