Swiss banking giant %UBSGroup (NYSE: $UBS) is urging investors to protect themselves amid the current market turmoil by purchasing %Silver.
The Zurich-based bank has reaffirmed its positive outlook on silver, forecasting a price increase for the industrial and precious metal.
Silver prices have fallen below $30 U.S. per ounce in recent trading sessions.
However, in a note to clients, UBS said, “We think silver prices below $30/oz are unlikely to last over the next 3-6 months.”
The bank reiterated its forecast that silver should trade as high as $38 U.S. an ounce in the second half of this year.
UBS attributes the drop in silver prices to risk-off sentiment in global markets, largely due to U.S. President Donald Trump’s trade policies that have caused a major stock correction.
The bank stressed that it expects the current drop in silver’s price to be temporary and “unlikely to be of a similar magnitude” to what happened during the Covid-19 pandemic.
Continued investor demand and the prospect of further interest rate cuts by the U.S. Federal Reserve are seen as positive and should lead silver’s price higher in coming months, said UBS.
A weaker U.S. dollar should also help lower the opportunity cost of owning silver.
Given the current set-up, UBS Group says investors should take a position in silver or stay long the metal and look past the current situation.
Silver is currently trading at $30.25 U.S. per ounce.
