UBS Cuts Silver Forecast Amid Soft Industrial Demand and Tighter Monetary Policy

UBS, the Swiss banking giant, has reduced its forecast for silver prices to $75 per ounce by March 2027. The revised outlook is based on two key factors: softening industrial consumption and more cautious investor buying.

The main contributors to this decline are solar manufacturers, who are reducing their use of silver in modules due to rising procurement costs, and the jewelry sector, which is showing less activity. Combined, these demand categories account for a 50 million ounce decline in overall demand.

However, not all demand channels are shrinking. The increasing adoption of artificial intelligence (AI) and data centers is driving up silver demand in this space, with data centers alone accounting for over 10% of total demand in electrical and electronic applications next year.

The combination of tighter monetary policy and softer industrial prospects suggests that prices may remain within their established range for now. The upcoming US-China talks will be closely watched by investors, as any trade-policy signals emerging from these discussions could have a significant impact on the silver market.