UBS Holds Its $70 Silver Target as Forced Selling and Chinese Buying Pull the Market Apart
Published on 10/25/2026 at 17:41 | Editorial boerse-global.de
Silver traders are caught between two clocks. On one, margin calls and energy-driven inflation fears are dictating the next few sessions. On the other, UBS Global Wealth Management is looking all the way to December 2026 — and it likes what it sees.
The bank's strategist Giovanni Staunovo reiterated a price target of $70.00 per ounce by that date, pointing to the build-out of AI infrastructure and a persistent structural supply deficit as the forces that should underpin the metal over the longer haul. That is a recovery call, not a declaration that a bottom is already in.
A Week That Belonged to the Sellers
The near-term picture is far less comfortable. COMEX front-month silver settled Friday at $53.96 an ounce, a weekly loss of 5.6% that lays bare the intensity of the recent selling. Rising oil prices have sharpened inflation worries and fed expectations that US interest rates will stay elevated for longer. On top of that, media reports describe silver sales used to plug losses in equity and AI-related positions — with margin calls forcing investors to raise cash regardless of their view on the metal itself. Such flows are driven by liquidity needs elsewhere in a portfolio, not by the outlook for silver.
The oil move has a geopolitical edge: Houthi attacks on Saudi Arabia and risks to shipping through the Strait of Hormuz have pushed energy markets higher, adding the prospect of prolonged tight money to existing concerns about industrial activity.
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StoneX market analyst Fawad Razaqzada had flagged the $50 to $55 band as a key support zone on Friday. He saw no clear reversal signal yet, attributing the pressure to the broader precious-metals selloff, costlier crude and reawakened inflation fears. Chart-based stabilization, in other words, remains a precondition for the rebound UBS envisions rather than something already achieved.
China Offers the Other Side of the Ledger
Against that financial-market stress, the physical market is telling a different story. Chinese customs data released Thursday showed September exports of high-purity unwrought silver at 309.77 tonnes, down 23.7% from August, while imports jumped 73.5% month on month.
The inventory picture fits. Shanghai Metals Market reported on Wednesday that tracked Chinese silver stocks fell by 75 tonnes in a week to 3,833.92 tonnes, citing stronger buying by downstream users at lower prices and seasonal jewellery demand in Shenzhen. That points to a pickup in Chinese demand — though it does not yet amount to evidence of global scarcity.
Nor do the physical signals line up neatly. The CME Group noted on Thursday that exchange inventories are rising and that industrial demand from the solar sector is softening, both near-term headwinds.
Solar Savings Versus New Consumers
The demand story is where the two horizons diverge most sharply. The Silver Institute expects industrial silver demand to fall by roughly 2% in 2026, with thrift in photovoltaic applications the main drag. A broad acceleration in industrial consumption is therefore not what carries the recovery thesis.
UBS instead emphasizes shifts within that demand base. Data centres, AI hardware, power grids and automotive electronics are expected to offset part of the solar savings, which means the interplay between applications matters more than any single end market. The bank also expects 2026 to deliver the sixth consecutive annual global supply deficit — a structural prop for prices, though as the latest rout shows, it is no barrier to sharp interim declines.
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UBS's targets extend beyond the December 2026 call: $75 an ounce by mid-2027 and $80 by September 2027. The bank lists higher-for-longer rates, a deeper global slowdown and faster industrial substitution as risks, and a firm dollar could also hamper the rebound.
The Fed Takes the Next Handoff
The immediate test comes from monetary policy. The Federal Reserve meets on October 27 and 28, with market participants largely expecting rates to be left unchanged, according to the Associated Press. September PCE inflation data follow on October 29.
For silver, the two timeframes now sit side by side: Chinese purchases and the UBS forecast support the recovery case, while inflation and rate expectations will decide whether the selling pressure eases first. The demand signals on their own do not yet add up to a durable turn in trend.
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