Five Reasons to be Prepared

7.31.24 - Five Reasons to be Prepared

Gold last traded at $2,425 an ounce. Silver at $28.70 an ounce.

UBS: Silver prices under pressure, but not for long -Yahoo! Finance

If you were waiting for the right time to buy silver, that time has come. Silver has been under pressure recently, and it looks like that's all about to change. A position in silver will give you the protection of tangibles in your portfolio, with what could be the added benefit of some great gains.

Silver prices might be under pressure at the moment, but an expected surge in the macroeconomic environment might be enough to push the precious metal up rapidly, UBS analysts Dominic Schnider and Wayne Gordon have argued.

Silver fell more than nine per cent over the last three weeks, undoing the rally that it experienced throughout April and May.

UBS attributed this, at least partially, to weaker macro prints in recent months, with sentiment data like purchasing managers' indexes being "rather soft, especially outside the US".

However, with the US earnings season expected to be robust, and macro data in the US holding up, the Swiss bank's analysts argued that silver's downturn "should be short-lived".

"With speculative accounts in the futures market having loaded up material long positions, profit- taking or risk-reduction can kick in at any time," explained the analysts. "Such positions are more sensitive to risk-off events in markets, in our view."

The UBS analysts suggested that investors should continue to back silver, especially as interest rates begin to fall and the US dollar peaks.