Craig Hemke - Is the Bull Market Back? Technicals vs. Fundamentals in Gold
Summary
Gold and silver double-bottomed near $4,100 and $61, reclaimed their 200-day moving averages, and are showing follow-through that supports a short-term bullish view.
Craig Hemke argues technicals matter near-term, but the runaway growth of US debt (a $293 billion May deficit) is the enduring driver pushing gold higher.
The US Dollar Index has traded sideways between 98 and 100 for over a year; a break below 98 toward 96 would act as a strong tailwind for metals.
Fed chair nominee Warsh is unlikely to echo Volcker; the post-WWII playbook of yield curve control and negative real rates fits the debt-reduction need better.
Even a sideways year for gold fits history: long-run gains average 9-10% annually in major currencies, and fiat devaluation math points to higher prices within five years.
Craig Hemke's takeaways
- Top takeaway The guest argues the runaway US debt is the decisive driver: a $293 billion May deficit (about $10 billion a day), roughly $1.7-1.8 trillion annualized, and interest expense running near $1.3 trillion a year, which forces fiat devaluation and keeps the gold uptrend intact regardless of technicals or headlines.
- He is optimistic short term: gold and silver double-bottomed (gold near 4100, silver near 61), silver is back above its 200-day moving average, and he sees room for silver to run to 80-85 within its 65-95 range, with a break above 95 accelerating things.
- He expects the incoming Fed chair Warsh to be dovish rather than a Volcker-style hawk, citing post-WWII yield curve control and negative real rates as precedent, and thinks a 'wait and see' first meeting could be read as dovish and reverse the rate-hike fears of the past 100 days.
- On the dollar, he says its 96-100 range over 13-14 months matters mainly intraday, and a break below 98 toward 96 as the summer progresses would be very bullish for metals, as in January when the index fell 3 points in 12 days.
- He accepts a sideways year for gold would be fine — gold still around 4400 per ounce as of the episode and he expects it to double to about 8800 within five years as fiat purchasing power erodes.
Shad Marquitz's takeaways
- Top takeaway The host frames the technical setup: gold and silver double-bottomed around 4100 and 61 respectively, silver is back above its 200-day moving average and gold is tagging it, and he is cautiously waiting to see whether the bounce makes a higher high.
- He weighs charts most heavily for the near term but argues the debt and inflation fundamentals are what keep investors committed to the sector for the long haul.