Michael Oliver Says Silver ‘Won’t Stop’ at $500, Shorts Will ‘Get Killed’!

He is walking that number back, and not because he thinks the metal fails. “I’ve come out before on your program and come out with notions of 3-$500. And frankly, I’ve pulled those not because I think it’s not going to get there. It’s because I’m not sure it’s going to stop there.”

That is the line SilverTrade should tape to the monitor. Oliver is describing a market that, in his work, has only started to scream.
“This process that only began with that surge in December, January, that wasn’t the end of something. That was an initial scream by the market that said, I’m going to break your walls down.”

Price action, in his read, is not a $70 brick wall defended by gods. Front month was around $65 when they taped, back above the January $63.90 low, the March area near $61, and the $55 to $56 washout.

August 5 was his intermediate buy date for silver, gold, GDX, and SIL. Two prior rallies after the winter drop failed. He says the third one is different.
Four weeks of pressure after the recent high gave back only several dollars week to week, “not even half of the gains” from a two to three week August surge that was “twice as strong as this pullback.”

Short term momentum, which he usually ignores so clients do not get dizzy, now says the dip is wrapping up. Reclaim $70, actually $71, and “you’re going to start to cause some price chart folks to say, hey, I didn’t think it was going to do this.”

The juicier case is relative value, not the round number. Silver, plotted his way as a percent of gold, sits about 1.5 percent of the gold price. Late last year it broke a roughly 10 year box of compressed cheapness versus gold and has not negated the breakout.

In 2011, when silver tagged $50 again, that reading was 3.1 percent. In 1980 it was 6.5 percent. “Just to get back to the top of the box… you had to double the current relative value of silver to gold.”

If the relative chart takes out those old highs, he is talking about more than a double versus gold, maybe a trip back toward the 1980 extreme.
His book is “heavily biased towards silver and silver miners.”

Then he lined silver up against the rest of the industrial complex and called the lag what it looks like. Copper near $1 in 1980 and later around $6.50. Gold from $850 to the mid $4,000s. “Lead, zinc, aluminum, steel, they’re all much, much higher than they were in 1980. And yet silver is lagged and it has a supply demand deficit. What’s going on? Well, it sort of suggests it has been manipulated. The problem is reality will win.”

The short side gets the punchline. “If you’ve held something back for too long or help contribute to it being restrained and capped off, when you get overrun by that market seeking its true reality, you’ll get killed.”

He also waved off the inflation adjusted “all time high” story. Even with official CPI, $50 in 1980 is something like $250 today. Use a harder inflation measure and a $1,000 print “is not that ridiculous.”

Miners, he said, are a “far more robust” tape than the metal and have started to say they will lead gold, not trail it. That package sits on top of the sovereign debt mess and a Fed that still thinks it runs a risk free rate in a market that is repricing the whole monetary stack.Oliver will not audit COMEX open interest versus vault metal. He said he cannot assess the paper multiple and will not pretend otherwise.

His point is cruder. Dynamic trends drown the headline noise.
Silver has the deficit, the lag versus every cousin metal, a relative breakout versus gold, and a December January surge he reads as the first scream, not the top.

Shorts who treated $70 as a ceiling and $500 as a fantasy number are, in his wording, standing in front of a market that is done asking permission.