Michael Oliver: Mining Stocks Are on the Doorstep of a Move That Will BLOW YOUR HEAD OFF!

The founder of Momentum Structural Analysis is not talking about another bounce that fades. He is talking about a shift big enough to throw the old charts in the trash.

“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. And we’re literally on the doorstep right now.”

That is the quote of the interview. Everything else is the case for why he thinks the door is already open.

This rally is the one that sticks

Three weeks before the interview, Oliver’s firm issued a buy signal as gold and silver lifted off the last low. Two earlier rallies in the prior six months failed and rolled over. He said this one would not.
“This is the beginning of the real move.”

He does not claim the path will be a straight line. He does claim the structure has changed. Momentum, in his work, has flipped from failed bounce to sustained advance. Institutions, he says, are already acting like they believe it.
Silver leads. Miners lead harder.
Oliver’s allocation is not polite. It is pointed:

“We argue silver is going to be the better place and it’s going to have a furious recovery.”

“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.”

“If I’m in the monetary metals now, I’d be silver, gold and silver miners with an emphasis on silver miners.”

He notes silver spent half a century trapped in a roughly $55 range while other metals quadrupled. Then it broke out, doubled, and even the later pullback failed to kill the breakout versus gold.

Now it is upticking again. A four figure silver price, he said, would not surprise him.

Why the miners can double gold’s gains

The lag in mining stocks is the setup, not the objection. Oliver walks through the XAU versus gold. For years the index lived near a valuation around 25 percent of an ounce of gold. It collapsed toward 4 percent. That, in his words, is “off the page cheap.”

The spread has since pushed up through a 13 year technical base and recently printed around 9.1 percent. His read is simple. The first surge out of that hole should be fast.

“That means in the next surge you could expect miners to double the gains of gold.”

He pointed to names such as Newmont and Wheaton Precious Metals exploding back toward their highs in about three weeks. That kind of snapback, he said, is an overstatement of what is coming if you own the miners instead of only the metal. In other words, the teaser rally already happened. The main event is the relative catch up.

Who is buying

Oliver does not think this is a retail stampede yet. He thinks large managers are rotating because their usual hiding places look worse.

“The people grabbing it right now are not the retail public. Some large asset managers sitting up, I’m in.”

The stock market looks worrisome. Treasury bonds are no longer the automatic ballast. Gold is the alternative. But big funds, he says, do not want to express that with futures or calls. They buy miners.

The fuel is a government bond crisis

Oliver’s fundamental driver is not a single headline from the Middle East. It is the decay of the money unit itself. Punch in M2, he says, and you get a ballistic, parabolic chart. More units, less buying power.

“The dollar’s real buying power is degrading constantly.”

He uses the house price example. Grandfather built a house for $4,500. Father paid $45,000. The median is now $450,000. The house did not become that much more house.
The dollar became that much less dollar.

Now the bond market is the crisis layer on top of that decay. Japan already showed the strain. The United States, in his view, is in the same boat, supporting others so they will not dump Treasuries.

“It’s a circle of printing.”

Last month’s close on 30 year futures was the weakest in 25 years, meaning yields that high. Officials can intervene. Intervention is printing. Printing is “fuel in the gold’s gas tank.”

“We have a government bond crisis, something we’ve never had in the last 50 or so years.”

“The crisis we’re facing now is going to be historic. It will impact all major asset categories in major ways. I think gold, monetary metals will be a leader on the upside.”

“All of your assumptions are out the window, they don’t matter anymore. A new reality will come about.”

Commodities are waking up behind them

Oliver also flags the broader commodity complex as a sleeping giant. Copper, platinum, grains, sugar. Throw a dart, he said, and come back in two years smiling. Copper already jumped from a long era near a dollar a pound toward much higher prints. That is the real economy asset class starting to reprice after years of looking comatose while gold ran first.

The bullish bottom line

Oliver’s message on this taping is not cautious.
The buy signal is in.
Silver is the better metal. Miners are the better expression. Institutions are already moving. The bond market is the catalyst that forces more printing.

The old 1980 and 2011 top templates, he says, do not apply.

“We’re literally on the doorstep right now.”

If he is right, the lag that frustrated mining investors for years is the discount that is about to close, and it is going to close fast.