Commodities analysts at Swiss bank UBS (NYSE: $UBS) say that investors should buy silver if its price falls below $50 U.S. an ounce.
Silver is currently trading at $59.67 U.S. per ounce, having declined 51% from an all-time high of $121.67 U.S. an ounce reached on Jan. 29 of this year.
UBS says that if the price falls much further, it will open up an attractive entry point for investors.
The European banking giant has actually lowered the price range it considers attractive for buying silver on the current downslope.
“We initially pointed to $55/oz and below as levels where buying the dip looked attractive but now lower this range to $48-50/oz while reiterating that such prices are likely to be short-lived,” wrote UBS in a note to clients.
The bank says that silver, like other precious metals, has seen it price pressured in recent months by rising oil prices that are inflationary and likely to lead to higher interest rates.
Rising interest rates are a negative for non-yielding assets such as silver.
However, demand for silver could be reignited as investors again look for safe haven assets with tensions in the Middle East on the rise.
UBS is urging investors to move quickly if silver’s price falls below $50 U.S. an ounce in coming weeks, saying that continued weakness is likely to be temporary.
UBS says interest rates could move lower in 2027 if inflation moderates and that industrial demand for silver is likely to strengthen in coming months.
Silver is both a precious and industrial metal. It is used to make jewellery and in electronic devices ranging from smartphones to solar panels.
UBS forecasts that silver’s price will rise to $70 U.S. an ounce by December of this year and reach $75 U.S. per ounce by March 2027.
UBS stock has gained 43% over the last 12 months to trade at $52.78 U.S. per share.
