Mining stocks set to soar and ‘blow your head off,’ says analyst Michael Oliver
Key Takeaways
- •Michael Oliver said silver is likely to be the stronger performer than gold in the next major move in monetary metals.
- •He said the rally in silver and mining shares could accelerate over the next six months to a year.
- •Oliver has worked in futures markets since 1975 and previously predicted silver would rise above $100 an ounce before it reached that level in January.
- •He argued that the current crisis could affect major asset classes and put monetary metals among the leaders on the upside.
- •Oliver said rising debt and money creation are weakening cash and raising questions about central banks.
Veteran market analyst Michael Oliver says the current gold and silver rally marks the beginning of substantial moves higher for mining and metals stocks — and he expects silver, not gold, to lead the next big move.
“We’re about to see something out of the monetary metals and their miners that will blow your head off, that will take all those old patterns that you look at and just throw them in the can,” said Oliver, founder of North Carolina-based Momentum Structural Analysis. “And we’re literally on the doorstep right now.”
Oliver made the comments this week in an interview with Northern Miner Group video anchor Devan Murugan.
“We argue silver is going to be the better place and it’s going to have a furious recovery,” he said. “For especially the next six months to a year, I suspect you want to be in silver and miners. It’s going to be quick, so you better be there or not be there.”
A futures-market veteran since 1975, Oliver built his reputation in part by anticipating the 1987 stock-market crash and later supplying institutional research to Wachovia. More recently, he called silver’s 2025 rally and forecast prices above $100 per oz. before the metal reached that level in January.
That history has made his current view notable for traders and miners alike, since silver and mining shares often draw attention when investors are looking for leverage to moves in precious metals. Oliver did not frame the call as a broad market forecast, but as a view on where he thinks monetary metals could show the strongest relative strength.
A ‘new reality’
Oliver argues the crisis the world is facing now will be historic.
“It will impact all major asset categories in major ways. I think gold, monetary metals will be a leader on the upside,” he said.
“All of your assumptions are out the window, they don’t matter anymore. A new reality will come about. And I suspect some of the wave effects will be questioning central banks,” he said. “They create a problem, the bubble breaks, they come in, they print more.”
Cash, he argues, constantly decays in value because governments are always increasing its supply and their own debt.
“The dollar’s real buying power is degrading, and that, coupled with well, the U.S. government debt market, the Japanese government debt market which led us to hell already,” he said. “We have to give them money to support them so they won’t dump our bonds. It’s a circle of printing.”
“Suddenly we have huge statist debt problems that can’t be shrugged off,” he added.
Source: The Northern Miner
