A strategist from UBS stated that precious metals are poised for a favorable upward trend. Gold and silver prices have weakened since hitting highs on January 29: gold was then at $5,620.80 per troy ounce, and silver reached $121.785 per ounce. Since then, both metals have seen significant declines: gold has fallen approximately 16%, while silver has plummeted 26%. Data shows that although gold has now fallen below $5,000 per ounce, it still maintains a year-to-date gain of about 8%; silver's year-to-date increase exceeds 20%. The retreat from the January highs is primarily attributed to several factors: 1. From late 2025 to early 2026, gold and silver experienced a significant speculative bubble. The volatility during this bubble was extreme. It was reported that the Chicago Mercantile Exchange, a major U.S. futures market operator, raised trading margin requirements four times between January and February to curb speculation and promote rational market trading. 2. The Middle East conflict that erupted on February 28 has reached a stalemate. The Strait of Hormuz is largely shut down, and permanent ceasefire negotiations have stalled. The strait holds crucial economic importance: U.S. Energy Information Administration data indicates that before the conflict, approximately 20% of the world's daily crude oil passed through it. 3. Products including the iShares Silver Trust, SPDR Gold Shares, and the iShares MSCI Global Silver and Miners ETF have further amplified price volatility in precious metals. Following Iran's blockade of oil tanker traffic through Persian Gulf ports, crude oil prices surged. Light, sweet crude has surged 78% this year, breaking above $102 per barrel; globally traded benchmark Brent crude, traded in London, surpassed $106 per barrel, marking a 74% year-to-date increase. Soaring oil prices have further pressured precious metal trends. UBS Raises Gold Price Target, Bullish on Year-End Strength Joni Teves, a metals strategist at UBS in Singapore, stated that the institution remains firmly bullish on gold. It was reported that during an Asian media conference call on May 12, she said, "We believe gold prices can recover from current levels and reach new highs within the year." UBS's current target price for gold is set at $5,600 per ounce, with potential to challenge $6,000, representing a further increase from its $5,400 target set at the beginning of 2025. Multiple institutions have concurrently raised their forecasts: JPMorgan Chase raised its baseline target to $5,500, with an extreme scenario reaching $6,300. Yardeni Research predicted at the beginning of the year that gold would break $6,000 by year-end and could reach $10,000 by the end of the decade. Silver Also Favored by UBS Between June 2025 and its peak, silver surged nearly 270%, briefly approaching $122 per ounce before experiencing a significant crash. Historical patterns show that major silver declines often persist for years: prices collapsed in the 1980s after the Hunt brothers of Texas attempted to corner the market, and a long-term downtrend began after the peak in early 2011. However, UBS's Teves believes silver has re-entered an upward trajectory and could recover to $100 per ounce by year-end. Like gold, silver is supported by institutional capital from banks, asset managers, and brokerages. More crucially, silver possesses strong industrial attributes: its excellent thermal and electrical conductivity makes it a key raw material for the technology industry. Data from silver trader GR Reserve indicates that nearly half of global silver demand comes from technology companies.
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