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Strong Price Outlook in Precious Metals Resuming

19/10/2019 by eBusinessTechnology Leave a Comment

The outlook for gold and silver bullion prices has again turned to strong. Several significant factors are increasingly working in favour of precious metals as an investment.

 

Precious Metals Bullion Investing, gold and silver Canadian Maple Leaf bullion coins, one ounce
Gold , Silver Bullion Coins

The great sell-off triggered in late-summer of 2011 by ETFs pulling out of and liquidating huge gold and silver positions has long been digested by the markets. Prices sat in a narrow band for an extended period of time after the sell-off which made price declines appear over-exaggerated in precious metals. In fact, both precious metals kept much of their value on closer scrutiny, with gold performing not too bad in particular.

Increased Demand for Non-Paper Assets

In the intermediate term, and with the advent of Crypto currencies, some investment money looking for alternatives to fiat or paper investments had gone into Bitcoin, Litecoin, and other of the so-called virtual currencies or, rather, Crypto coins or tokens.

Basel-III Has Moved Gold to “Tier-1”

With a number of both fundamental and technical recent events, this trend in favour of Crypto seems to be reversing for a few months now. The most prominent one among these is the move of Gold Bullion in Basel III banking regulations to a tier-1 asset, up from tier-2. This means that gold held by commercial banks as a capital reserve is now an asset which is marked to market with a 100% instead of the earlier 50% of its market value when it was classed as a tier-2 asset.

Other significant factors include technical hurdles in Crypto prices. Crypto prices — most significantly shown in the Bitcoin (core) market itself — are  now forming an NSW (narrow sideways-channel, or something of a plateau) from a technical point of view. This makes it increasingly hard for Crypto prices to break out and continue upwards.

Prices Bottoming Out in Technical Analysis

So far, the result of all of the above has been a bottoming-out in precious metals prices, followed by a significant turnaround, in the wake of this summer’s Basel III re-classification of commercial bank gold holdings. In the process, the gold price has broken out of its own narrow-sideways-channel between $1300 and $1430 and is currently testing the $1500 barrier. While $1500 seems to be a significant hurdle and may take some time for gold prices to tackle, once cleared the upward move in gold is likely to accelerate. Silver should then follow suit.

We have yet to see if Crypto coins will be able to shrug this off easily or whether this will drain yet more capital out of the Cryptos as an asset class and drag Crpyto market prices down further.

___

Editor’s note: an introductional booklet to Precious Metals investing by the author of this post has just been released as a paperback edition. It is available in the U. K. through Amazon here.

Filed Under: Crypto, Economics, Gold & Silver

Important information

I am not a medical doctor, lawyer or financial adviser. I do not offer medical, legal or financial advice on lawfulrebel.com. However, I research issues extensively and follow evidence to find truth. I speak from my experience of asking root-cause questions and discovering surprising truths. I write about and share what I choose do as a result of my own reasoned questioning of the assumptions and conclusions in the mainstream narrative.

There are affiliate links on this site. I only recommend products and resources that I personally use and consider to have great value. If you click on an affiliate link to buy something, you pay no extra cost, but I receive a small percentage as commission.

I aim to offer value and truth to you the thinking community. Nigel Howitt

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