UBS Forecasts Silver to Reach $38 in 2025 as Industrial Demand Surges

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Wee explains that while gold has surged approximately 35% year-to-date due to global economic uncertainties, its role remains largely as a hedge against inflation and slowing growth. Gold’s appeal as a safe haven has been fueled by rising demand from Asian central banks and robust inflows from North American exchange-traded funds (ETFs). UBS projects gold prices could reach $2,900 per ounce by September 2025.

However, Wee emphasizes the strategic importance of diversifying into silver to capture additional growth potential, especially as the global economy shows resilience.

Silver’s Unique Industrial Edge

Silver is not only a hedge but also benefits from high industrial demand, especially in sectors experiencing rapid growth. Its extensive applications in tech, electric vehicles, LEDs, and medical devices make it more sensitive to economic expansion than gold.

Wee highlights that silver’s price dynamics differ because of this industrial component, providing a unique dual advantage for investors seeking to balance portfolio defensiveness with potential growth.

“Investors might consider adding silver to their portfolios as it provides a level of defensiveness similar to gold while incrementally benefiting from stronger economic growth,” Wee notes. UBS expects that continued growth in U.S. GDP and robust industrial demand will further boost silver’s appeal as both a hedge and a growth asset.

Silver’s Outperformance Potential Relative to Gold

Wee projects that silver will outperform gold in the coming years, with the gold-silver price ratio expected to decline from its current level of 84 to the mid-70s by next year. This shift reflects silver’s combined strength as both an industrial metal and a store of value, making it a compelling choice in a “no landing” scenario where GDP growth persists without a downturn.

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For investors seeking yield opportunities, UBS recommends a “long” position in silver. With prices consolidating near recent highs, UBS believes that silver’s unique role in the global economy positions it well for growth, making it an ideal asset for balancing risk and capitalizing on economic expansion.

Key Insights:

• Silver Target: UBS projects silver prices could reach $36-$38 per ounce by 2025.

• Dual Role: Silver acts as both a hedge and a growth asset due to industrial demand.

• Gold-Silver Ratio: Expected to decline from 84 to mid-70s, favoring silver’s outperformance.