UBS Forecasts Silver to Reach $80 by Late 2027, Citing Gold's Tailwinds

UBS analysts have set a bullish outlook for silver, forecasting the precious metal will climb to $80 per ounce by September 2027, driven primarily by the same tailwinds supporting gold. The bank expects silver to continue trading as a higher-beta version of gold, benefiting from persistent fiscal concerns and long-term risks to the U.S. dollar's purchasing power.

Price Outlook and Key Drivers

In a research note, UBS strategist Dominic Schnider outlined a series of price targets, projecting silver will reach $70 per ounce by December 2026, $75 by mid-2027, and ultimately $80 by September 2027. The forecast is based on a spot price of $66.50 recorded on September 18.

Schnider stated that silver's price action remains tightly correlated with gold, with the relationship near multi-year highs. The primary drivers supporting both metals include:

• Persistent government fiscal concerns.
• Expectations for less restrictive monetary policy over the long term.
• Questions about the long-term value of the U.S. dollar.

Industrial Demand and Supply Dynamics

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While silver's investment case is linked to gold, its industrial applications provide a structural support pillar. Schnider noted that while high prices have led to some substitution and reduced usage in solar panel manufacturing, this is being offset by growing demand from other high-tech sectors.

Consumption is expected to be bolstered by growth in data centers, AI infrastructure, grid investment, and electric vehicles. On the supply side, growth remains constrained, as most silver is produced as a byproduct of lead, zinc, copper, and gold mining. This limits the industry's ability to quickly ramp up production in response to higher prices, Schnider explained.

Near-Term Risks and Strategy

Despite the positive medium-term outlook, UBS acknowledged potential near-term headwinds, including a more hawkish Federal Reserve and the possibility of further interest rate hikes. Schnider advised that investors should consider using periods of price weakness to build exposure rather than chasing short-term rallies.

The bank also sees "limited scope for a sustained rise in the gold-silver ratio above 70x." Key risks to the forecast include a sharper-than-expected decline in industrial demand or a significant deterioration in global growth. However, Schnider concluded that "the balance of risks remains tilted toward higher silver prices."