Investing.com -- UBS has lowered its price expectations for silver , platinum , and palladium as softer industrial demand and macroeconomic uncertainty weigh on the market outlook.

While all three metals remain in deficit, UBS strategist Joni Teves said they have noticeably lagged behind gold’s rally, with silver and palladium facing the sharpest forecast downgrades.

“Given their more industrial nature, rising concerns about growth weigh on demand expectations and sentiment,” Teves said in a note, adding that he was revising its targets to reflect both mark-to-market adjustments and a “weaker growth backdrop.”

The downgrade is not a full reversal in stance. Teves emphasized that he still sees upside from current spot levels and does not expect these metals to diverge from gold in the same way as base metals.

“We are toning down our previous outlook, rather than turning outright negative,” he wrote.

Silver remains most likely to benefit from investor rotation during peak gold enthusiasm. UBS notes that silver’s supply-demand fundamentals are still compelling and the market would only move into surplus if industrial demand dropped by around 30%—a level not seen since the 1990s.

Investors remain skeptical, as seen in flat exchange-traded fund (ETF) flows year-to-date versus a 7% jump for gold. But while it could take some time for silver to catch up to the bullion, once it starts, the move “is likely to be quick,” Teves said.

“Peak “FOMO” in gold as the rally accelerates is also likely to prompt investors to look for alternative, cheaper ways to position and silver is well placed to benefit,” he added.

In the case of platinum, the price outlook now hinges largely on constrained supply, especially as mine output drops and the metal trades “below the 90th percentile of the cost curve.”

However, Teves warns that the metal lacks a compelling demand narrative and that “the uncertain macro backdrop is making investors nervous about the outlook for platinum.”

Palladium demand appears even more fragile, as over 80% of consumption comes from the auto sector.

Teves believes that substantial declines in vehicle sales “could bring forward surpluses” in the market, though he expects prices to have bottomed and foresees only a modest recovery ahead. “Looming surpluses should cap the market in the long run,” the strategist continued.