Silver probably needs more time to go into the lead again | 9 April 2021
Silver Price Forecast relative to Long Term Monthly - Medium Term Weekly - Short Term Daily - and Hourly (not shown) data.
(Previous week in brackets)
|Trend||↓ (↓)||↓ (↓)||↑ (↑)|
|76 (76)||22 (27)||58 (28)|
Total allocation 35% (35%)
9 April 2021 close: Silver USD started a correction in August 2020 after reaching the 30 handle. After the 2nd attempt to beat 30 silver now seems to consolidate this longer correction and may still push a bit lower from the current 25 level. Risk weight is also fairly neutral which is why we reduced our position a little in favor of Gold. One important observation to make with regards to precious metals investing and silver in particular. It is critical to own physical or physically backed metals in an account. Owning physical silver privately is rather cumbersome. The 30 kilo bars would be required and they are best held in a trusted vault and allocated in the buyer's name. The same really applies to Gold. We don't believe anyone will ever again carry physical gold bars or coins around to barter them. Large investors would do best to find a Swiss solution either using the Bitpanda exchange where a 'cold Gold or Silver or Platinum wallet' holding will be 100% backed by physical metal and easy to trade 24/7 using a mobile application or acquire via a trusted intermediary in Switzerland, Liechtenstein or Austria. Bitpanda unfortunately cannot yet onboard US or CAN passports. Just Europeans at this moment. Onboarding always involves the AML compliance procedure as all these trusted intermediaries will always be regulated by the national financial authority.
Silver however remains a solid 'hodl' in the wealth protection portfolio. No Change.
2 April 2021 close: Silver took another hit which is not unusual, but given general volatility in financial asset markets, the 5% peak to bottom drop during the week was mild and ending the shorter week with a minor loss at 24.93. The new mkn ths has just started with 2 days of data which caused the Monthly risk weight trend to turn down from a medium high risk, whilst Daily and Weekly risk are at bullish divergence pivots. This potential divergence and the status of Long term monthly risk weight is strong indication that our long term forecast still stands. And that is for a much higher silver price although medium expectation is for Gold and especially Platinum to outperform Silver. No Change. Note that the portfolio mix for all precious metals is down to 35% of total due to a stronger increase in crypto holdings during March.
Silver risk analysis
9 April 2021: The quarterly risk chart looks bullish with risk weight up and below 80%. It defends our view that we are still in a medium term correction since August 2020. As we are only 10 days into Q2 we may expect the correction to end within this time period and possibly see a strong close to this quarter going into the summer. This doesn't necessarily impact our wealth protection holding.
2 April 2021: The quarterly risk chart now ending June 30 2021 has ticked up. Of course we are just a few days into the new quarter, but the present primary uptrend, which in Elliott terms is defined as a 'Cycle' wave, has some way to go. Risk is higher but not at any extreme by the standard of previous advances. How fast price reacts is impossible to predict but this market looks very firm and should not be abandoned, We remain fully committed to holding physical silver at about 10% of the total portfolio.
GOLD/SILVER Ratio Price Risk Analysis
(Previous week in brackets)
|Trend||↑ (↑)||↑ (↑)||↓ (↓)|
|7 (7)||48 (40)||58 (75)|
Total allocation 35% (35%)
Gold Silver ratio analysis
9 April 2021 close: Silver had a slightly stronger week in the cross with Gold. Monthly risk is turning up from 6% but the overall picture from all time scales is the potential development of bearish divergence between short term and long term risk. For that means Silver shouldn't be the outperformer in the metals space until that technical picture is confirmed or otherwise mitigated. We still believe that Platinum will continue in that role with still stronger active divergence from equilibrium. The quarterly Gold/Silver risk chart has barely changed at 12% risk and still strongly down. As the current Gold/Silver Ratio trend is a primary cycle in time, the long term outlook is still for Silver to outperform Gold by some extend or more.
2 April 2021 close: Gold/Silver rallied to 70.60 on Wednesday before settling at 69,50 into Easter. Both move did not come unexpected as short and medium term risk time scales drove it up with Daily diverging from Monthly, which risk trend did turn up, but divergence caused silver to adjust a little from its present short term weaker position amongst metals. The long term trend of the Gold/Silver ratio is potentially still down but appears to pause which may take several weeks or months in range trading. We also completed the 1st quarter of 2021 and the quarterly Gold/Silver ratio chart below shows entering a low risk percentage, which may also contribute to a price pause after having corrected a full 50% from the Covid peak in March 2020.
9 April 2021 A correction is underway and we should already expect a resumption of the new primary trend before the end of the month.
2 April 2021 The Platinum to Silver ratio is important as a technical cross check against the overall portfolio metals distribution. Daily risk hasn't reached extreme or divergence in its own timescale and remains in a general uptrend.
9 April Hard to predict from a trading point of view. Trend is down from a mild bearish divergence but could just move around with large price corrections up and down. Monthly is leading in a primary cycle with strong uptrend.
2 April We expect to see a medium term first consolidation in the 50-60 Platinum to Silver range established in 2017 to 2019. Higher risk with a minor degree of bearish divergence but still in uptrend.
9 April We should expect monthly momentum to drive risk weight into the 80% level. Itr may take a few months for Platinum to reach that initial higher 60-65 handle chart objective in the Platinum/Silver cross.
2 April Monthly risk in strong uptrend is a leading indicator whilst Platinum is in the process of making a full technical recovery towards equilibrium.
9 April Quarterly risk shows a slightly lower print of 69% at the beginning of Q2 which is not an indication. We need to wait for the quarter to develop and finish to get a read of further long term direction. This pictrure still looks the quarterly trend has not finished with a long term objective of 70+.
2 April Quarterly is an even stronger lead indicator as Platinum/Silver has started the adjustment to long term equilibrium closer to 70. Platinum remains a slight favorite amongst metals, hence our broadly balanced allocation towards Gold, Platinum and Silver.