Silver Chartbook – Basel 3 The Silver Bull

Basel 3, a voluntary regulatory framework to stress test central banks worldwide, requires banks to hold a percentage of assets back to deleverage their lendings. On June 28th, a new regulation will be set in place that disvalues unallocated gold paper contracts held against lendings. At the same time, physical Gold changes its spot from a Tier 3 asset to a Tier 1 asset. It will count as a 100% reserve asset. This provides banks with an enormous opportunity to pay off debt and makes Gold highly attractive to accumulate before this event and exchange inflated dollars for bullion. Basel 3 the Silver bull.

Gold being the leader in the precious metal sector has a massive effect on Silver, and this is again another factor for our strongly bullish consensus.

Silver in US-Dollar, Daily Chart, Last weeks chart:

(Click on image to enlarge)

Silver in US-Dollar, daily chart as of May 21st, 2021. Basel 3 the Silver bull.

Silver in US-Dollar, daily chart as of May 21st, 2021.

We published the green part of the daily chart above in our last week’s chartbook release pointing towards the consistency of the lower green regression channel line. With the additional transactional support supply line from our fractional volume analysis at US$26.85, odds were stacked. The astute reader took a low-risk entry below US$27, the day after chartbook release. The right side of the chart illustrates the target near US$28.50. This has been the 4th trade in this upward move that allowed for these low-risk market engagements. A part of time closing in towards Basel 3. Typically more significant retracements would follow after such an extension, but we continue to advocate the lower green line to be one for low-risk entries. Only because the situation with Silver due to Basel 3 is unique.

Silver in US-Dollar, Weekly Chart, Acquiring coins and bullion:

(Click on image to enlarge)

Silver in US-Dollar, weekly chart as of May 20th, 2021.

Silver in US-Dollar, weekly chart as of May 20th, 2021.

The weekly chart above shows how Silver’s strength doesn’t ease even after a significant up-leg from March 2020. A bullish continuation triangle shows a minor trend within. Transaction volume has cemented a carpet of support below the price. It is again the lower green line that we find most attractive for low-risk trades (acquisitions). Just do not be deterred by the price difference between the spot price and the actual physical acquisition price.

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Disclaimer: All published information represents the opinion and analysis of Mr Florian Grummes & his partners, based on data available to him, at the time of writing. Mr. Grummes’s ...

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