Silver prices may continue to fluctuate in the coming months but are unlikely to deliver significant gains over the next year, according to strategists at UBS. The bank expects the metal to stabilize modestly above current levels after a strong rally and recent volatility driven by geopolitical tensions.
“Silver prices, like gold, have been volatile during the U.S.-Israel conflict with Iran and Iran’s retaliation against neighboring countries,” strategists Dominic Schnider and Wayne Gordon said in a note.
Spot silver was trading at around $84.2 per ounce as of 11:08 GMT on Thursday.
The metal briefly approached the $100 per ounce level following the escalation in tensions before pulling back below $85, underscoring what UBS described as silver’s “limited value as a long-term hedge.”
Recent trading in silver has been marked by unusually high volatility. Realized volatility over the past one to three months has hovered near 100%, while options markets imply forward volatility of roughly 70% to 80%. According to the strategists, these levels are “comparable to or exceeding that of Bitcoin,” highlighting the uncertainty surrounding the metal’s valuation.
UBS expects prices to stabilize around $85 per ounce and reiterated its broader outlook, forecasting a potential peak close to $100 per ounce around mid-2026 before easing back toward $85 by March 2027.
Despite the recent rally, the bank noted that investor positioning suggests waning enthusiasm for silver. “Fewer ETF long positions and lower Comex open interest indicate silver is not preferred in uncertain times,” the strategists wrote.
“Even gold typically experiences short-lived price effects during such events, as seen during the first Gulf War,” Schnider and Gordon added.
From a fundamental perspective, UBS still expects the market to remain undersupplied, estimating a deficit of roughly 300 million ounces. However, the bank warned that downside risks remain if demand from industrial users or the jewelry sector weakens, especially after silver prices have nearly tripled since early 2025.
Overall, UBS maintains a constructive medium-term view but cautions that near-term returns may be less appealing. “Over the next 12 months, projected returns are less attractive based on our long-term forecast of $85/oz,” the strategists said.