UBS cut its silver price forecast from 100 to 85, and silver fell back to around 76.35—where is the bottom?
2026-05-26 16:36:03
On Tuesday (May 26) during Asian trading hours, silver prices gave back some of the previous day's gains, trading around $76.35, a drop of over 2%. Renewed geopolitical uncertainty following Monday's "self-defense strike" by the US military in southern Iran exacerbated market concerns about energy-driven inflation and reinforced expectations that central banks will maintain tight monetary policies for a longer period, thus weighing on non-interest-bearing assets such as silver.
A U.S. Central Command spokesman said the U.S. military conducted a "self-defense strike" in southern Iran on Monday, targeting missile launch sites and Iranian vessels attempting to lay mines. According to reports, Central Command spokesman Tim Hawkins said in a statement that the strike was intended to protect U.S. forces "from the threat posed by Iranian forces," and asserted that the U.S. military would continue to "exercise restraint" during the ongoing ceasefire.
According to multiple Iranian media reports, three explosions were heard in Bandar Abbas late on the 25th local time, and similar explosions were also heard in Sirik and Jask along the Strait of Hormuz.
Social media reports indicate that two speedboats belonging to the Iranian Islamic Revolutionary Guard Corps Navy were attacked by US warplanes that evening, reportedly resulting in multiple deaths. In response, Iran opened fire on US warships in the Gulf of Oman, and the US subsequently launched an airstrike east of Bandar Abbas, triggering the activation of Iranian air defense systems.
Despite the initial tensions caused by the exchange of fire, Fox News, citing senior U.S. officials, reported that the U.S. airstrikes had "temporarily ended" and the overall situation was relatively calm.
However, against this backdrop of economic anxieties, diplomatic efforts offer a potential respite. The US and Iran are currently negotiating a framework agreement to extend the existing ceasefire by approximately two months. If the two sides ultimately finalize the agreement, Washington will lift its maritime blockade, and Tehran will reopen the crucial Strait of Hormuz, potentially stabilizing global energy markets.
According to reports, US President Trump stated that negotiations on an agreement to end the conflict with Iran and reopen the Strait of Hormuz are "progressing well." However, he also warned that a breakdown in negotiations could trigger new military strikes, although it is rumored that Pakistani mediators have informed China that an agreement is close to being reached.
The short-term trend of silver prices will depend on the substantial progress of the US-Iran negotiations.
If an agreement is reached and the Strait of Hormuz reopens, the decline in oil prices will alleviate inflationary pressures and may weaken expectations of interest rate hikes, providing support for silver prices. Conversely, if negotiations break down and geopolitical risks escalate, while risk aversion may boost silver prices, rising energy-driven inflation and rising expectations of interest rate hikes will also exert downward pressure.
Besides the impact of geopolitics on demand, the supply side of silver is equally important. In mid-May, Peru declared an energy crisis due to a natural gas pipeline explosion, tightening industrial gas quotas and causing continued power shortages. Peru is the world's third-largest silver producer, with nearly 70% of its silver coming from associated mines, making mining and smelting highly dependent on energy. Energy and power constraints suppressed mine operating rates, and market expectations for a tightening of global silver supply intensified.
In a recent research report, UBS significantly lowered its silver price forecast for the end of Q2 2026 from $100 to $85, its year-end target from $85 to $80, and its forward target for March 2027 to $75. UBS pointed out that the silver market is facing triple pressures: cooling investment demand, weakening industrial consumption, and a rebound in mine supply. The supply-demand gap is expected to narrow sharply from the previously estimated 300 million ounces to 60-70 million ounces.
HSBC also warned that the global silver market supply gap will narrow from 143 million ounces in 2025 to 73 million ounces in 2026, and further to 25 million ounces in 2027. HSBC believes that the narrowing supply gap, coupled with weaker industrial and jewelry demand, will limit the potential for continued silver price increases.
Geopolitical risks and policy expectations are intertwined, putting short-term pressure on silver prices.
In summary, silver is currently affected by the dual uncertainties surrounding the US-Iran situation: on the one hand, US military actions have exacerbated geopolitical risks, pushing up inflation and interest rate hike expectations, thus suppressing silver prices; on the other hand, progress in US-Iran negotiations could alleviate pressure on the energy market, providing breathing room for silver prices. In the short term, silver price movements will be highly dependent on substantial progress in US-Iran negotiations, the navigation status of the Strait of Hormuz, and changes in global central bank policy expectations.
From the daily chart, spot silver is currently trading around $76.35, in a consolidation phase after a recent pullback, with multiple technical indicators showing neutral to weak signals.
(Spot silver daily chart, source: EasyForex)
Regarding the moving average system, the short-term moving average MA20 ($77.77) is above the current price, forming short-term resistance; MA50 ($75.81) is below the current price, forming medium-term support; MA100 ($81.31) is significantly higher than the current price, indicating significant medium-term pressure; and MA200 ($66.14) is below, forming long-term support. This arrangement of "price sandwiched between MA20 and MA50" suggests that silver is at a critical juncture for directional choice, facing short-term pressure but still possessing medium-term support.
At 16:11 Beijing time on May 26, spot silver was trading at $76.37 per ounce.
Geopolitical Developments: US Military Launches "Self-Defense Strike" Against Iran
A U.S. Central Command spokesman said the U.S. military conducted a "self-defense strike" in southern Iran on Monday, targeting missile launch sites and Iranian vessels attempting to lay mines. According to reports, Central Command spokesman Tim Hawkins said in a statement that the strike was intended to protect U.S. forces "from the threat posed by Iranian forces," and asserted that the U.S. military would continue to "exercise restraint" during the ongoing ceasefire.
According to multiple Iranian media reports, three explosions were heard in Bandar Abbas late on the 25th local time, and similar explosions were also heard in Sirik and Jask along the Strait of Hormuz.
Social media reports indicate that two speedboats belonging to the Iranian Islamic Revolutionary Guard Corps Navy were attacked by US warplanes that evening, reportedly resulting in multiple deaths. In response, Iran opened fire on US warships in the Gulf of Oman, and the US subsequently launched an airstrike east of Bandar Abbas, triggering the activation of Iranian air defense systems.
Despite the initial tensions caused by the exchange of fire, Fox News, citing senior U.S. officials, reported that the U.S. airstrikes had "temporarily ended" and the overall situation was relatively calm.
Diplomatic efforts: US-Iran negotiations are "progressing well," but Trump warns that a breakdown in talks could trigger military strikes.
However, against this backdrop of economic anxieties, diplomatic efforts offer a potential respite. The US and Iran are currently negotiating a framework agreement to extend the existing ceasefire by approximately two months. If the two sides ultimately finalize the agreement, Washington will lift its maritime blockade, and Tehran will reopen the crucial Strait of Hormuz, potentially stabilizing global energy markets.
According to reports, US President Trump stated that negotiations on an agreement to end the conflict with Iran and reopen the Strait of Hormuz are "progressing well." However, he also warned that a breakdown in negotiations could trigger new military strikes, although it is rumored that Pakistani mediators have informed China that an agreement is close to being reached.
Silver Outlook: A Tug-of-War Between Geopolitical Risks and Interest Rate Hike Expectations
The short-term trend of silver prices will depend on the substantial progress of the US-Iran negotiations.
If an agreement is reached and the Strait of Hormuz reopens, the decline in oil prices will alleviate inflationary pressures and may weaken expectations of interest rate hikes, providing support for silver prices. Conversely, if negotiations break down and geopolitical risks escalate, while risk aversion may boost silver prices, rising energy-driven inflation and rising expectations of interest rate hikes will also exert downward pressure.
Peru's energy crisis impacts supply expectations
Besides the impact of geopolitics on demand, the supply side of silver is equally important. In mid-May, Peru declared an energy crisis due to a natural gas pipeline explosion, tightening industrial gas quotas and causing continued power shortages. Peru is the world's third-largest silver producer, with nearly 70% of its silver coming from associated mines, making mining and smelting highly dependent on energy. Energy and power constraints suppressed mine operating rates, and market expectations for a tightening of global silver supply intensified.
Institutions lower silver price forecasts
In a recent research report, UBS significantly lowered its silver price forecast for the end of Q2 2026 from $100 to $85, its year-end target from $85 to $80, and its forward target for March 2027 to $75. UBS pointed out that the silver market is facing triple pressures: cooling investment demand, weakening industrial consumption, and a rebound in mine supply. The supply-demand gap is expected to narrow sharply from the previously estimated 300 million ounces to 60-70 million ounces.
HSBC also warned that the global silver market supply gap will narrow from 143 million ounces in 2025 to 73 million ounces in 2026, and further to 25 million ounces in 2027. HSBC believes that the narrowing supply gap, coupled with weaker industrial and jewelry demand, will limit the potential for continued silver price increases.
Geopolitical risks and policy expectations are intertwined, putting short-term pressure on silver prices.
In summary, silver is currently affected by the dual uncertainties surrounding the US-Iran situation: on the one hand, US military actions have exacerbated geopolitical risks, pushing up inflation and interest rate hike expectations, thus suppressing silver prices; on the other hand, progress in US-Iran negotiations could alleviate pressure on the energy market, providing breathing room for silver prices. In the short term, silver price movements will be highly dependent on substantial progress in US-Iran negotiations, the navigation status of the Strait of Hormuz, and changes in global central bank policy expectations.
Spot silver daily chart technical analysis
From the daily chart, spot silver is currently trading around $76.35, in a consolidation phase after a recent pullback, with multiple technical indicators showing neutral to weak signals.
(Spot silver daily chart, source: EasyForex)
Regarding the moving average system, the short-term moving average MA20 ($77.77) is above the current price, forming short-term resistance; MA50 ($75.81) is below the current price, forming medium-term support; MA100 ($81.31) is significantly higher than the current price, indicating significant medium-term pressure; and MA200 ($66.14) is below, forming long-term support. This arrangement of "price sandwiched between MA20 and MA50" suggests that silver is at a critical juncture for directional choice, facing short-term pressure but still possessing medium-term support.
At 16:11 Beijing time on May 26, spot silver was trading at $76.37 per ounce.
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