XAG/USD Forecast: UBS Recovery View Faces Yield Pressure
Silver price rebound faces pressure from speculative selling and higher US real yields, Goldman Sachs warns, as UBS forecasts further gains in 2027.
Silver prices rebounded on Friday, but UBS’s forecast of $80 an ounce by September 2027 still depends on a substantial recovery from a market that has struggled to turn encouraging industrial indicators into sustained buying.
Spot silver closed near $60.83, up 2.2% on the day.
Robert Quinn, of Goldman Sachs FICC and Equities, writes: “Commitment of Traders encapsulating flows towards the end of September exhibited a large bearish turn in speculative positioning. Specifically, Managed Money, Other, and Non-Reportable net sold a combined $1.6bn from September 22nd – 29th, the largest weekly amount since February. Liquidation ($800mm) and new shorts ($800mm) contributed.”
The estimate covers speculative positioning, rather than physical silver sales.
Half the selling closed bullish positions, while half established new bearish bets.
Stronger industrial indicators have not overcome financial pressure
Quinn’s evidence for improving industrial prospects comes from equity-market indicators linked to sectors that use silver.
He writes: “Through early October, barometers for certain structural demand drivers improved. Over September 29th – October 7th, GS’s Data Center and Solar equity baskets rose 4.2% and 2.4% respectively. Both maintained positive correlation with Managed Money gross long changes during the past 6 months.”
These are equity-market indicators, rather than measurements of silver consumption.
During the same period, the financial conditions facing precious metals moved in the opposite direction.
Quinn writes: “However macroeconomic headwinds also proved formidable. Throughout the same time frame, US real rates edged higher and the Dollar increased (0.8%). Historically, stronger Dollar and real rate environments coincided with Managed Money gross long unwinds.”
Higher inflation-adjusted yields increase the attraction of interest-bearing assets relative to silver, while a stronger Dollar raises the metal’s cost for buyers using other currencies.
Quinn also identifies weakness in derivatives sentiment: “Thus in the end, the Silver price remained stuck with negative flows arguably persisting. Silver price fell 1.4%. Discretionary sentiment soured; consider normalized 25 delta put-call skew richened to the top 2 year decile. CTA selling also manifested, according to GS Futures Strategists’ framework.”
The options measure indicates stronger relative demand for downside protection, while Goldman’s framework points to selling by systematic futures strategies.
UBS’s recovery target faces an investment-demand test
UBS’s nearer forecast is $70 by December 2026, with further appreciation envisaged during 2027.
UBS has previously argued that higher gold prices and tighter physical conditions could support silver’s recovery.
UBS said: “Silver, meanwhile, should benefit from higher gold prices and tighter near-term fundamentals.”
More recent CFTC futures data for 6 October show managed-money investors still net long silver, but with that balance edging lower from the preceding week.
These futures-only figures cover a narrower group than Goldman’s combined-category estimate.
Goldman sees a possible easing of one obstacle to recovery, rather than confirming that the selling has ended.
Quinn writes: “While acknowledging uncertainty over Middle East developments, note GS FX Research believes one pillar of Silver resistance, namely Dollar upside, could stall. Given stretched positioning on several pairs and recent Fed communication, the team is cautious on near-term Dollar prospects.”
Silver price prediction, news FAQ
What is UBS’s silver forecast?
UBS forecasts $70 an ounce by December 2026 and $80 by September 2027.
Has Goldman Sachs issued an $80 silver target?
No. The $80 forecast belongs to UBS. Goldman’s report analyses positioning and market pressures.
Was the $1.6bn selling a prediction?
No. Goldman estimates it occurred across the specified speculative categories during 22-29 September.