In a recent interview with Liberty and Finance, veteran technical analyst Michael Oliver of Momentum Structural Analysis (MSA) delivered a stark warning about impending market shifts, predicting a significant surge in precious metals, particularly gold and silver, coinciding with a potential stock market downturn. Oliver's forecast, based on his proprietary momentum structural analysis, suggests the current "staircasing" pattern in gold is about to give way to a more rapid, "accelerated phase."
Oliver, known for his long-term trend analysis, argued that recent gold pullbacks, which have sparked concerns among many investors, are merely temporary pauses. "People are still saying, 'Oh, that's it, 3,000 was it?'... If you look at the price chart, even... you don't top that way," Oliver stated, dismissing fears of a definitive top at the $3,000 mark. He believes these are simply "idiot levels" that will soon be surpassed.
Stock Market Breakage: Fueling the Fire
A core element of Oliver's prediction is the ongoing "breakage" he sees in major global stock markets. "We think the stock market breakage is more fuel for gold, not what most people think," he asserted, contradicting the conventional wisdom that a stock market decline would negatively impact precious metals. He specifically pointed to the S&P 500 and Nikkei 225, noting that "they are breaking structure."
Oliver highlighted the NASDAQ 100 as a key indicator, stating, "NASDAQ 100 will be the leader on the downside as well." He suggests that a significant drop in this tech-heavy index would signal a broader market collapse, triggering a flight to safe-haven assets like gold and silver. "When you knock them in the face once or twice, then they don't have anything to smile about anymore. And that's when you inject emotion into markets," Oliver explained, predicting a shift in investor sentiment that will drive money into precious metals.
Oliver also anticipates that silver and gold miners will significantly outperform gold in the coming months. "If we enter an acceleration phase in the net price of the monetary metals, we think we're also going to see silver outpace gold," he said. He further emphasized the potential of gold miners, noting, "We think gold miners could triple their current relative performance to gold over the next year or so."
He argued that these sectors are currently undervalued, presenting a compelling investment opportunity. "The money from stock market longs will move into gold mining long positions," Oliver predicted. He pointed out the "tiny nature of the gold mining sector" suggesting that when the market does shift, it will be a "panic situation" that will "shock a lot of gold investors."
3,000 Dollar Level: A Psychological Barrier
Addressing the significance of the $3,000 gold price level, Oliver acknowledged its psychological impact. "We know idiots love round numbers," he quipped. However, he believes that the recent rejections at this level are merely temporary pauses. "3,000 bucks is an idiot level," he stated, suggesting that the market will soon move beyond it.
He also addressed the common question of why now, noting that the factors in play are "even more intense this time." He mentions the "major players like central banks moving into gold more aggressively" as a key factor.
Oliver advised investors to closely monitor the NASDAQ 100 for signs of a broader market downturn. He also highlighted the importance of observing the bond market, "which is saying yep, there's some fair scared money starting to move out of the stock market."
He also pointed to the dollar index, stating that if it "drops down to and closes a month at we're going to blow an annual momentum trend structure that goes back a couple decades." This, he warned, would create "a wave creator" that would further impact markets.
Oliver's analysis is rooted in his unique momentum structural approach, which focuses on identifying long-term trends and pivotal shifts in market dynamics. His insights, often contrasting with mainstream narratives, are sought after by investors looking for deeper market understanding.
As market volatility continues, Oliver's predictions serve as a crucial point of reference for investors navigating uncertain times. The "accelerated phase" he predicts for gold and silver could represent a significant opportunity for those prepared to act.
Watch the full interview:
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