Whether you like it or not, silver and gold are joined at the hip. Although the regulations do not mention silver in the Basel III regulations, it refers to gold. Instead of being a Tier 3 asset, gold is now a Tier 1 asset. Effectively, bullion holdings by the bank will now reflect at 100% of its value instead of 50%.
The effect of Basel III on banks is simply that the banks cannot lend more money than the assets on their books. Analysts believe that this move will motivate banks to increase their gold holdings. In 2021 central banks started to buy gold bullion. The buying of bullion by central banks is at least 20- 30% higher than in previous years.
Although the price of gold has not benefited dramatically yet, many investors believe that the gold price is under its real value and suppressed. The long-term outlook for gold is bullish, and the price of silver bullion will benefit as demand for physical gold increases.
The inflationary trend of the economy supports the bullish outlook for gold. The out-of-control money printing by the Fed flowed into financial assets. In the last 10 -months, the FED created 9 trillion in money and paid it out through various subsidy schemes.
To put matters in perspective, you need to consider that it took 300 years to create $800 billion in wealth. The policies of the FED will dramatically affect the markets, and it will fuel inflation. The economy is already wobbling, with 50 million people unemployed.
When people realize that the house of cards is coming down, the money in the financial assets will flow into hard assets. Precious metals like silver and gold will benefit from the inflow of money.
Many investors bought silver coins and bars to accumulate their wealth. The price of silver is volatile due to its economic applications. Many investors bought silver at a low. The investors are anticipating that because of the inflationary policies of the FEDS, interest in silver will increase. They also believe that Basel III will further strengthen the price of silver, causing it to break through the level of $27 per ounce.
When silver breaks through the level of $27 per ounce, it will be a good time to buy bullion Brisbane. The price of silver bullion will more higher as a breakout because of the inflow of money into hard assets. I, however, believe that the price increase will not last very long. The outflow of funds from financial assets coupled with high unemployment rates will cause the economy to falter.
Since they use silver in many economic applications, the demand for silver will increase. It will consequently create an under supply of silver in the economy. The short market for silver will create upward pressure on the price of silver.
It will be a good time to buy bullion Brisbane and to get as many your silver coins and bars as you can in our possession. It is best to plan your strategy now to ensure that you buy your bullion before the price of silver increases and you miss the price rise again.