Silver, Your Money Is Safe

November 6, 2020

Markets do not like uncertainties. Tight elections one more time provide for that uncertainty. Even when this topic will be resolved we find ourselves in times where uncertainty is spelled in capital letters. 2020 has slowly but steadily eroded one feeling certain and secure. Already from a psychological perspective alone, it is useful to nourish one’s lack of feeling content. Precious metals have a bountiful history to provide for these good feelings if tucked under one’s mattress. Silver, your money is safe.

There is speculation of confiscation of physical precious metal ownership like we had in 1933 with Gold, as a major risk factor for betting on hoarding some coins and bars. One argument against such fear is that in those times gold was actual money. Almost all speculators had either psychical precious metals in their possession or had it tied to their investments. We had a gold standard till 1971 where one could trade one’s fiat currency into this physical tangible. It is estimated that today only one out of a hundred people holds physical precious metals. This makes today’s situation vastly different and as such much less likely to face a law “confiscating” your precious metal holdings.

Silver, Monthly Chart, Great support:

Silver in US Dollar, monthly chart as of November 5th, 2020

You find above a monthly chart where we analyzed volume over the last ten years on Silver. It results in a stronghold of the US$20.39 price level for support. Right below that we find the US$20.00 support level. Fiat currency denominations of 1, 2, 5, 10, 20, 50, 100 dollars are deeply ingrained in our minds. Consequently, they are natural support/resistance zones from a psychological level.

The ten-year decline of price showed this year in March a strong reversal pattern (yellow circle). A quick drop in price from US$20.00 quickly reversed. Prices have more than doubled from their lows and volume confirmed this reversal. We see prices advance to their highs of 2011 (US$49.81) and would take partial profits (see our quad exit) shortly before since the round number of US$50.00 would also function as resistance overhead.

Silver, Daily Chart, Silver, your money is safe:

Silver in US Dollar, daily chart as of November 5th, 2020

Zooming in to the daily time frame, we see a window of opportunity (green square) for long-term play entries. A recent volatility increase provided for a dip which is supported by linear regression channel support zones. We took advantage of this low risk opportunity and placed an entry live in our telegram channel.

Silver, Daily Chart, Showing strength:

Silver in US Dollar, daily chart as of November 5th, 2020 b

The daily chart viewed not as an entry tool for longer-term plays but rather as an evaluation for short-term position plays is bullish as well (purple dotted arrows). Price violated (turquoise circles) numerous strong directional support zones (white lines). Volume confirmed these violations. Nevertheless, the recent reentry into the trend channel shows strength. While there are no low risk entries for position plays, this time frame confirms our long-term view.

Silver, your money is safe

History rhymes but doesn’t always need to repeat itself. Some technicians insist that what has happened in the past will be happening in the future. We care to differ when facts alter probabilities of a reoccurrence. At this point of uncertainties blossoming like weeds, we find a step into physical ownership of Silver to be one of the most prudent ways to protect your wealth and your sanity.

We post real time entries and exits for the silver market in our free Telegram channel.

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Peru became the world’s largest producer of silver in 2012.

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