Investing.com -- UBS expects silver prices to climb in 2025, buoyed by lower U.S. real yields and stronger global industrial production, even as the metal struggles to match gold's central bank-driven gains.
Silver prices rose over 20% in 2024 but recently lost momentum due to higher U.S. yields, a strong dollar, and growth concerns outside the U.S. The metal is trading near its 200-day moving average, with speculative short positions growing and ETF holdings stabilizing after significant outflows earlier this year.
Despite these headwinds, UBS remains bullish, maintaining a target of $36-$38 per ounce for 2025.
Rising yields have been a headwind, but a decline could boost silver’s appeal.
A shift toward cyclical commodities is needed, which UBS expects to materialize as 2025 progresses.
UBS notes silver’s correlation with gold remains high, while its co-movement with industrial metals underscores its dual role as both a precious and industrial metal.
The gold-silver ratio, currently near 88.4x, could see silver gain ground relative to gold. UBS believes a ratio above 90x is unsustainable unless an economic recession materializes.
While silver lacks the support of central bank purchases, UBS highlights that higher gold prices lend underlying support.