Silver Selloff Tests $500 Target: Why Shorts Had "Better Cover"

Introduces Michael Oliver and his $300-$500 silver call, noting the recent sell-off in silver and gold following a strong US jobs report that shifted market expectations from rate cuts to a potential rate hike.

Jeremy Saffron

Michael Oliver

Fed policy is essentially irrelevant to the major trends in monetary metals. Historical examples (1975-1980) show gold and silver exploded during sharp rate rises and recession.

A lot of assumptions people operate on are not true broadly. The Fed is a trend chaser, not a trend maker.

Asks if investors should ignore the Fed reaction or wait for a specific silver level to confirm the structure.

Jeremy Saffron

Michael Oliver

We wait for our momentum numbers. The long-term momentum trend of silver and gold is undamaged. The recent price drop has only damaged intermediate-term structures.

Our last major buy signals were at $25 (2024), $35 (2025 summer), and $56 (November last year). Since then, the major trend is up.

Michael Oliver

The market has had three pullbacks since January, but after six months of selling pressure, there is no net continued decline. Someone is buying gold and silver at these levels.

The March 23rd sell-off ran the stops and quickly reversed. The bears have had six months to break the market lower and failed.

Michael Oliver

If silver moves back into the $72-$74 zone next week, shorts should cover. The bears have had their three shots to break the market and failed.

We have built structure overhead. Momentum levels will trigger a breakout well before price reaches $100 again.

Asks if silver has been mispriced for 50 years, referencing Oliver's report showing gold breaking into new ranges while silver was contained.

Jeremy Saffron

Michael Oliver

Silver has been caught in a 10-fold range ($4-$50) for 50 years, while gold made vastly new highs each bull swing. Silver is now saying 'no more' and will catch up.

M2 money supply has increased 25-fold since 1980. If silver merely caught up to that relationship or what copper did in 2005-2006, it would be $500.

Asks how silver can reach $300-$500 when markets are pricing a Fed hike, not a cut, and the liquidity expansion his thesis depends on seems absent.

Jeremy Saffron

Michael Oliver

The real issue is the government debt market. The Fed will be forced to print money to defend it, just like the BOJ. This is a government bond crisis.

The CIO of Morgan Stanley said the 60/40 portfolio is dead, now 60/20/20 with 20% gold. T-bonds are not a safe place. The Fed's mandate is to defend government debt.

Asks if the trigger for gold and silver is the bond market break itself or the market realizing the Fed's rescue makes the currency problem worse.

Jeremy Saffron

Michael Oliver

Gold knows this, but nobody talks about it. The real issue is the ongoing printing of money. Gold has been the place to be during multi-year bear markets in stocks.

In 1929-1932, gold miners went vertical. In 2000-2002 and 2007-2009, gold was net up. This time, T-bonds won't be an alternative, which could exaggerate the verticality.

Asks if gold is the safest expression of the thesis while silver is the highest beta expression.

Jeremy Saffron

Michael Oliver

Silver has lagged for whatever reason, but it is now saying it will have a tantrum. Markets often make excess highs, and silver has been in a box for 50 years.

In moves like copper and lead, there is a jiggle in the middle where people think it's the top, but the verticality comes after doubters have expunged their positions.

Asks how investors avoid getting shaken out on the lows or trapped at the highs if silver makes excess highs and lows.

Jeremy Saffron

Michael Oliver

We can't offer primary entry levels anymore, but we can offer a signal of when we come out of this congestion. I think that's likely to occur this month.

Our major long-term signals were at $25, $35, and $56. Those have already occurred.

Asks about equities, noting Oliver has compared this to tops in 2000 and 2007, and asks what tells him this is a rotation trade.

Jeremy Saffron

Michael Oliver

The stock market has been in a topping process for over a year. We have the same quarterly momentum structure as before the 1987 crash. A break back below 7,000 next quarter would be a landmine.

You don't top on a dark headline, you top with smiles. The market broke out above 7,000, but if it gets back below, momentum says there is a multi-year floor that will blow out.

Asks if new highs would invalidate the topping process or if they could be part of the trap.

Jeremy Saffron

Michael Oliver

New highs don't invalidate the topping process. The key is to watch for a gentle rollover. If the market oozes back below 7,000 next quarter, the floor could come out.

The financial sector looks very weak. Visa and Mastercard have been weak since October. Something is wrong in the credit markets.

Asks if the current market action (S&P down 2%, Nasdaq off 3%, yields jumping) is the kind of 'good news becomes bad news' action expected during a topping process.

Jeremy Saffron

Michael Oliver

Yes, but I don't expect a crash event until next quarter. A drop back below 7,000 would be 8-10%, not even correction territory. The subtle thing is a gentle rollover.

If you get back under 7,000 next quarter, you're not going to bounce. You're in the death zone. The fuse is burning.

Asks about the disconnect between paper markets and physical reality, and what mechanism takes silver to $300.

Jeremy Saffron

Michael Oliver

The fundamental driver is the historic underpricing of silver relative to gold, copper, and the money supply. Silver broke through a 10-year ceiling in its relationship to gold in November.

That spread is still well above the breakout. It says now is time to buy silver rather than gold. Silver will vastly outpace gold in the next handful of months.

Asks what conventional Wall Street models are missing and what would break his thesis.

Jeremy Saffron

Michael Oliver

Wall Street models don't have the horizon that something dramatic is going on. They always shift targets by $100-$200. None see the coming bond crisis.

What would break the thesis? If the bears get what they think - a return to sit on top of the old highs. In tantrum moves, that doesn't happen.

Asks if the range has surprised him and if the age factor now enters.

Jeremy Saffron

Michael Oliver

The range is a little longer than I expected, but the age factor now enters. Six months of selling and you can't get it going. The clock says you better do it right now.

If you uptick back into the mid-70s again, you lost. Highly likely we're coming out of here.

Asks about miners, noting Oliver has called them the leverage play on a leverage play, and asks where the spread between miners and gold is sitting.

Jeremy Saffron

Michael Oliver

The XAU/gold spread is about 8%. If it breaks out, miners could double or triple in relative value to gold. I think it's going to break out.

You could throw a dart at a list of miners and probably hit. All of them are going to go up dramatically. I'd throw the dart at silver miners.

Asks what happens after the move to $300-$500 and what the exit strategy is.

Jeremy Saffron

Michael Oliver

After the move, there will be a sharp sell-off, but it won't go back to $100 or $50. I will shift into cash, which is gold. Gold has held its value over decades.

The other side of this silver and gold explosion will be legalization of them as currency. We may reach a new global perception of what's money.

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