UBS Maps a Three-Stage Silver Recovery While Rate Fears Keep the Market Pinned
Published on 10/26/2026 at 03:10 | Editorial boerse-global.de
UBS Global Wealth Management has laid out a staggered path for silver that stretches well into 2026, even as the metal struggles to find its footing under the weight of inflation anxiety and expectations of prolonged high US borrowing costs. The bank's forecast, reported on Saturday, sees the price reaching $70.00 per troy ounce by December 2026.
Getting there won't be a straight line. UBS expects the metal to climb to $75.00 an ounce by mid-next year and to hit $80.00 by September of that same year. The bank points to AI infrastructure demand and persistent structural supply deficits as the forces underpinning that trajectory.
A Market Under Pressure From Two Sides
The optimism stands in sharp contrast to the current mood. Rising oil prices have rekindled inflation worries, and Reuters reported that the prospect of higher-for-longer US rates weighed on silver futures on Thursday. The pressure carried into Friday, with the COMEX front-month contract settling at $53.96 per troy ounce — no late-week rebound materialized.
That settlement price underscores just how far the market sits from UBS's recovery path. The weakness isn't purely a rates story, either. Softer industrial demand has added to the drag, meaning silver is being squeezed from both the monetary and the cyclical side. The gap between a long-term demand thesis and the current reality of mixed industrial usage limits how much comfort investors can draw from structural-growth arguments alone.
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UBS itself acknowledges the risks: the bank flagged prolonged rate hikes and industrial substitution as threats to its own bullish case. Its positive medium-term view came with an explicit warning about near-term turbulence driven by monetary policy, which makes the targets a projection rather than a signal that a turning point is imminent.
The Fed Meeting as the Next Hurdle
All eyes now turn to the Federal Reserve's Open Market Committee meeting on October 27–28, 2026. Market participants have recently expected rates to stay unchanged, but persistent price pressure has kept a possible December rate hike on the table. That makes the central bank's read on inflation as important as the decision itself — a pause alone wouldn't prove that the policy headwind has lifted.
The distinction matters for positioning. The recovery thesis rests on longer-acting demand and supply factors, while the recent selloff has been attributed mainly to shifting inflation and rate expectations. Both can coexist for a while, which is precisely why a bullish long-term call and short-term price pressure aren't contradictory.
Supply Picture Offers Only Partial Support
On the physical side, Metals Focus expects mine production to edge slightly lower, partly offset by increased recycling. That's a modest tailwind at best, and it doesn't easily extend the demand growth expected from individual future-facing sectors to the broader industrial base.
Until the Fed meeting clarifies how policymakers view inflation, UBS's optimistic forecast remains a medium-term scenario operating under an explicit short-term rate caveat. The recovery, if it comes, will have to earn its way past the bond market first.
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