Gold/Silver: New Basel III rules to provide the next "Tailwind"

Goodbye June and hello July as the new month brings new fund flows in precious metals as it is now more attractive for banks to hold Gold, a newly established Tier 1 asset. New banking rules, known as Basel III, came into effect, meaning Gold is as good as cash on a bank's balance sheet. We have discussed this before, and another component is the removal of hypothecated Gold counted on their balance sheet. I have spoken to many of you who have expressed distrust for large banking institutions and their ability to "paper" over the precious metals and artificially suppress prices. New rules could help smooth out some of the volatility in Gold and To further help you understand the quantitative analyses of the precious metals markets, we created a free "Gold Trends Macro Book," updated with silver slides. You can request yours here: Free Gold Trends Macro Book.

December Gold strategy

We continue to add to our strategy below as Gold and Silver are trying to solidify a technical bottom. Favorable data such as what we saw from the Payroll Data will bring bullish technical tailwinds that should push Gold out above $1800/oz, our next area of resistance. If you have been working with us and are looking to position in Gold for the long run, we suggested that our clients consider using FOUR Micro 10 oz December Gold contracts per $25,000 and buying TWO at 1775 and TWO at 1685, with a stop at 1640. Doing such would ideally risk $3,600. We would look to a gold target of 2100/oz, which would allow for a profit of $14,800. If you would like to learn more about the strategies we are implementing or learn more about technical analysis, we created a guide to provide you with all the steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Precious Metals.

Good luck and good trading,

Phillip Streible

Chief Market Strategist


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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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