Silver is being recognized as an investment with significant potential, especially in the context of changing economic conditions. While gold has traditionally been seen as a safe haven during times of economic uncertainty, silver is now being acknowledged for its dual role as a risk hedge and a growth asset.
Gold has seen a remarkable 35 percent increase in value since the beginning of the year, making it a favored choice for those seeking protection against slower economic growth and inflation risks. The demand for gold is further supported by increased interest from Asian central banks and positive inflows from North American exchange-traded funds (ETFs). UBS predicts that gold prices could reach as high as $2,900 per ounce by September 2025.
Despite gold's strong performance, UBS advocates for a diversified investment strategy that includes silver. Silver is not just a secondary option but a compelling asset in its own right. While silver prices historically correlate with gold, its industrial applications in technology, electric vehicles, and medical devices provide additional growth potential. This unique positioning allows silver to benefit from both defensive and growth-oriented demand.
The current economic climate, characterized by sustained GDP growth without a recession, positions silver favorably. As the U.S. economy demonstrates resilience, the demand for silver is expected to rise, particularly in sectors that heavily rely on its industrial uses. UBS forecasts that silver prices could climb to between $36 and $38 per ounce by 2025.
UBS predicts a significant shift in the gold-silver price ratio, with a decrease from 84 to the mid-70s over the coming year. This indicates a potential outperformance for silver relative to gold. Silver's dual role as a hedge and a growth asset makes it a valuable addition to any portfolio. By diversifying into silver, investors can protect themselves against economic downturns and capitalize on price appreciation driven by industrial demand.