Someday — who knows when that will be — the Middle East conflict will wind down. And that will be bullish for precious metals prices, a UBS strategist says.
Gold and silver prices have struggled since prices for both peaked on Jan. 29: $5,620.80 per troy ounce for gold and $121.785 an ounce for silver.
They’ve fallen a lot since: roughly 16% for gold and a whopping 26% for silver.
Gold, while under $5,000 an ounce, is still up about 8% on the year, based on Wall Street Journal data.
Silver is still up more than 20% on the year.
(In case you’re wondering , buyers and sellers of precious metals buy and sell using troy ounces, defined as 31.1035 grams. A regular ounce is 28.3495 grams.)
The declines for both metals since the January peaks are due to several issues.
- Peak prices coming during the big bubble that hit both metals in late 2025 and early 2026: The bubble’s eruption was so violent that the CME Group, which operates most U.S. futures markets, was forced to boost margin requirements for traders four times in January and February to make the trading more rational, according to the Wall Street Journal.
- Israel and the United States’ strikes against Iran: The Middle East conflict, which began Feb. 28, has devolved into something of a stalemate. The Strait of Hormuz has been largely closed, and negotiations for a permanent ceasefire have stalled. The Strait is economically critical. Before the war, about 20% of the world’s oil flowed through it every day, the EIA indicated.
- The rise of exchange-traded funds investing in metals or mining: These include the iShares Silver Trust, the SPDR Gold Shares, and the iShares MSCI Global Silver and Metals Miners ETF. They often add volatility to metals prices.
Crude oil prices soared as Iran blocked oil tankers leaving ports along the Persian Gulf. Light sweet crude is up 78% this year at more than $102 per 42-gallon barrel. Trading at more than $106, Brent crude, the global benchmark, is up 74%, based on trading in London.
The oil-price jump added pressure on metals prices. Since the war began, hints of ceasefires or settlements have pushed oil prices down while boosting metals prices. When war fears escalate or bombing starts, oil jumps and metals prices tank, Investopedia noted.
UBS offers a bullish gold target
Joni Teves, a UBS metals strategist based in Singapore, said her firm believes gold will finish the year strongly. In a May 12 call with journalists in Asia, she said that UBS, the Swiss banking giant, remains a bull on gold, The Star reported.
“We still think that prices can recover from current levels and continue to make new highs this year,” she said.
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UBS’ target for gold is now $5,600, with $6,000 a possibility. That’s up from the firm’s target of $5,400 an ounce when 2025 began.
Others have boosted their targets as well.
J.P. Morgan boosted its base target to $5,500 and said it’s possible gold could reach $6,300. Yardeni Research began the year predicting gold would hit $6,000 by year-end and has opined a $10,000 target for the end of the decade.
K.C. Alfred / The San Diego Union-Tribune / Getty Images
Silver also gets some love from UBS
Silver’s jump from June 2025 to nearly $122 an ounce was astonishing: nearly 270%.
And then it crashed.
Prior history suggests the decline could last for years. It fell apart in the 1980s after the Hunt brothers of Texas tried to corner the market, GoldSilver reported. It also fell after another peak in early 2011.
But UBS’ Teves believes the metal is on the upswing and could hit $100 an ounce by year-end. Like gold, silver has support from institutional investors such as banks, money managers, and brokerages.
More importantly, it is a key material used in technology applications, since the metal is one of the best conductors of heat and energy. Half of global demand for silver comes from tech companies, said silver dealer GR Reserve, with China and the United States among the biggest consumers of the white metal.
That demand may put a floor under the price — unless the global economy slumps, that is.
Related: Persian Gulf crisis claims a corporate victim as gold stock resets plans
