On the heels of gold futures breaking above the $3,700 level and silver futures surging to $42.98 this week, today Michael Oliver, the man who is well known for his deadly accurate forecasts on stocks, bonds, and major markets, warned King World News that smart investors are about to make a fortune!
This Is Amazing
September 13 (King World News) – Michael Oliver, Founder of MSA Research: “We looked at the relationship between the XAU, which is the Gold & Silver Miners Index, and its relationship to Gold. Between the 1980s, 1990s, and into early the 2000s, that spread between the XAU vs Gold had a range with lows in the 17%-18% zone. Meaning, divide the XAU vs Gold and it was (at the lows) 17%-18%. And high readings of 38%! It lived in the rectangle range for several decades!
In the 2009 topping action in the miners, and especially after the 2011 high, the XAU vs Gold spread collapsed (see chart above). Meaning, the miners imploded vs Gold on a relative basis. XAU vs Gold got down to as low as 4% (from a high of 38%). Think about that. Here you have the mining sector that lived on either side of 25% for decades vs Gold, and suddenly it collapsed to 4%. For the last 10+ years, since 2015, the XAU vs Gold has been in a range between 4%-8% (highlighted rectangular box). It has an upper end on that range as you pointed out, Eric, just above 8%. Well right now I just did the math and we are at 7.46%. So we’ve been rallying sharply on that spread.
If you go back over 8% again and you break out, and we argue that’s about to happen, where is resistance? If you look at the spread chart going back decades, you can see this floor that’s been used, and used, and used at 17.5%. Good grief. You’re talking about Mining Stocks vs Gold surging from roughly 7% to 17.5% just to reach resistance! That’s a massive percent gain on a relative performance. That’s like buying a stock at $7 and it goes to $17. That’s the explosion we think is about to occur in the miners.
So after having the XAU vs Gold around 25% for decades, it fell to 4%. It’s a bargain. It got undervalued for some reason, it was an error, and that error is about to be corrected. And it’s very dramatic in terms…stop what you are doing immediately and listen to Michael Oliver discuss how smart investors are about to make a fortune! Michael Oliver also discusses his latest price predictions for gold, silver, mining stocks and more CLICK HERE OR ON THE IMAGE BELOW.
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