Miner Spread Breakout Sparks Gold and Silver Bull Market Warning

Financial analyst Michael Oliver recently shared his insights on the gold and silver market with CapitalCosm. He pointed out that the current spread between miners and an ounce of gold is a significant signal for investors.

The spread, measured by the ratio of GDX (the VanEck Vectors Gold Miners ETF) to the price of gold, has been in a 13-year basement between roughly 5% and 8.5%. However, Oliver notes that this spread is now punching through the top of that box.

This development is significant because it suggests that miners are becoming more valuable relative to gold itself. In fact, according to Oliver's rule of thumb, when this spread upticks, both metals rise, but miners just rise harder, essentially doubling in value compared to gold.

Oliver emphasizes the importance of owning miner positions over individual gold or silver investments. He also notes that silver is doing a similar thing to gold right now, having already broken a decade-wide relative range last November.