UBS Forecasts Silver to Reach $80 by Late 2027 on AI Demand and Supply Deficits

Silver prices are poised to climb to $80 per ounce by September 2027, driven by persistent supply deficits and burgeoning industrial demand from the artificial intelligence sector, according to a new forecast from UBS Global Wealth Management.

In a research note, the bank's Chief Investment Office acknowledged that the metal faces near-term turbulence from central bank policy but maintains a constructive medium-term outlook. Strategist Giovanni Staunovo noted that silver continues to act as a "higher-beta version of gold," making it sensitive to macro forces like real interest rates and U.S. dollar strength.

Price Trajectory and Market Drivers

UBS outlined a phased price appreciation for silver over the coming years, targeting a significant rise from current levels.

• December 2026: $70.00 per ounce
• Mid-2027: $75.00 per ounce
• September 2027: $80.00 per ounce

This bullish forecast is underpinned by a combination of diverging industrial demand trends and inelastic supply. The bank advises that investors could use price pullbacks, often driven by shifting interest rate expectations, to build exposure rather than chasing rallies.

Diverging Industrial Demand

Ad

A key factor in the bank's analysis is the changing landscape of industrial silver consumption. While high prices have led to substitution and "thrifting" in the photovoltaic (solar) industry, prompting the Silver Institute to forecast a 2% contraction in total industrial fabrication demand for 2026, other sectors are providing a powerful counterbalance.

UBS highlights secular growth in demand from data center expansion, AI hardware, electrical grid investments, and automotive electronics. This new wave of demand is expected to more than offset the moderation in the solar sector.

Persistent Supply Constraints

On the supply side, the market is expected to face its sixth consecutive annual deficit in 2026, according to UBS. Mine output growth remains rigid because the vast majority of silver is extracted as a byproduct of lead, zinc, copper, and gold mining.

This structural constraint means miners cannot rapidly increase silver production to capitalize on higher prices. While secondary recycling has increased, it is not enough to close the supply-demand gap. However, UBS warned that a sharper-than-expected global economic slowdown, prolonged central bank rate hikes, or faster industrial substitution remain the primary downside risks to its price forecast.