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UBS Highlights Silver's Strong Potential as Gold Maintains Defensive Role

UBS Highlights Silver's Strong Potential as Gold Maintains Defensive Role

**UBS Predicts Silver Outperformance Amid Economic Growth and Industrial Demand**

UBS expects silver to outshine other assets due to its dual role as a hedge and a growth asset, fueled by economic expansion and industrial demand.

**UBS Highlights Silver's Growth Potential While Gold Retains Defensive Appeal**

In a recent report, UBS outlined the contrasting roles of gold and silver in managing economic risk, highlighting silver’s unique growth potential. UBS investment writer Julian Wee noted that gold’s 35% year-to-date gain reflects its popularity as a defensive asset, with demand bolstered by interest from Asian central banks and North American ETF inflows. Wee forecasts that gold could reach $2,900 per ounce by September 2025 as a haven asset amid economic uncertainties.

However, he urges investors to consider silver for its added advantage in a growth-driven economic climate, saying, "Silver provides both a defensive quality and the ability to capture gains from stronger economic growth." With resilient U.S. GDP growth and strong industrial demand, silver could be a strategic addition to portfolios, complementing gold’s role. UBS projects silver prices to rise to $36-$38 per ounce by 2025, recommending long positions or yield-enhancing strategies.

**Silver’s Growth Advantage in an Expanding Economy**

Wee points out that silver’s extensive industrial applications in sectors like technology, electric vehicles, LEDs, and medical devices increase its appeal. The prospect of a "no landing" scenario, where GDP growth continues without recession, positions silver to benefit from both defensive and growth-driven demand. As silver consolidates near recent highs, UBS expects the gold-silver ratio to decline from 84 to the mid-70s over the coming year, indicating potential outperformance for silver and making it a valuable asset for balancing risk and growth in investment portfolios.
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