Axel Merk & TG Watkins - Macro vs Technicals: Gold, GDX, Oil, Copper, Critical Minerals, US Markets
Summary
Gold sits above $4,000 with rising yields — Merk argues this bull market still has room, with mining equities under-pricing margins at higher metal prices.
Merk urges investors to weigh management teams over metal-price forecasts, calling capable operators the scarcest resource in the mining sector.
Watkins expects GDX, gold, and silver to pull back toward their daily 50-day moving averages after the late-summer melt-up, with prior lows as possible targets.
Oil breaking out near $100 raises inflation risk and complicates the Fed's path, putting pressure on equities broadly while favoring energy producers.
Equal-weight S&P and Russell 2000 breaking down while mega-caps hold steady signals seasonal weakness into the midterms, per Watkins's breadth work.
Axel Merk's takeaways
- Top takeaway Merk is constructive on gold and miners and says he puts his money where his mouth is, describing himself as a substantial investor in mining equities and physical gold and arguing the market is still not pricing in sector margins with gold above $4,000
- Merk argues that under Kevin Warsh the Federal Reserve is trying to stay in its lane by exiting QE, interest on reserves, and mortgage-backed securities, so monetary policy can return to rates and credit rather than political credit allocation
- Merk says a Warsh-led Fed is unlikely to deliver a large hiking cycle even if it raises rates, which he views as compatible with gold sustaining levels above $4,000 against higher yields
- Merk frames dollar reserve erosion as a fragmentation story rather than replacement by another currency, and warns that tariffs impede the flow of currency as well as goods, raising US borrowing costs
- Merk places the current bull market past the first inning, with open financing windows and conservatively priced miners, but warns that a closing of that window would change the picture
TG Watkins's takeaways
- Top takeaway Watkins says he doubled down on his GDX short at the recent top and is still looking for a pullback to the daily 50, with a possible retest of the 75-76 area if the downtrend resumes
- Watkins sees the same proportional pullback setup in SIL and the underlying silver and gold prices, expecting a retest of the daily 50 before the next move is clear
- Watkins is bearish copper near term, saying momentum has slowed on his MOXI indicator and price is likely to come back to the weekly 21 EMA, with the weekly 50 as a possible further target
- Watkins is bearish copper miners (COPX), calling them extended from the daily 50 and vulnerable to seasonal weakness, AI trade pressure, and prior February 2026 highs acting as resistance
- Watkins says the broader market needs to cycle lower, pointing to the equal-weight RSP breaking down through its daily 50 to the weekly 21 and framing the September-October midterm window as likely to deliver a washout before a renewed rally