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Craig Hemke – Strong Start To 2026 In Gold, Silver, and Copper – Macroeconomic Factors That Matter

The KE Report Jan 6, 2026

Summary

Mining shares lag spot metals even when gold, silver, and copper print record highs, as investors stay skeptical prices will hold.

COMEX margin hikes have pressured futures but not triggered a sell cascade, because physical demand keeps stepping in to absorb selling.

Spot-futures backwardation and a persistent Shanghai premium both signal the metals rally is being driven by tight physical supply, not paper flows.

Central banks have bought gold at a record pace for four straight years, accelerated after Russia was cut off from SWIFT in 2022.

Craig Hemke expects the Treasury to monetize the balance sheet via a gold repricing to fund a sovereign wealth fund, alongside possible yield curve control.

Scott Bessent's takeaways

  • Top takeaway Hemke credits Bessent as the architect of last year's surge, citing the February 2025 Oval Office comment that the sovereign wealth fund would 'monetize the asset side of the balance sheet' as the moment gold re-rated.
  • Hemke frames Bessent's pivot from austerity to 'grow our way out' as the basis for expecting more rate cuts, possible QE, and yield curve control if long rates sell off — all of which he sees as bullish for gold.

Craig Hemke's takeaways

  • Top takeaway Hemke argues the physical market — four straight years of central bank gold demand and a cumulative ~800 million ounce silver supply deficit — has fundamentally changed the metals setup versus 2011, so COMEX margin hikes and paper selling no longer produce a cascading decline.
  • He expects Fed funds to fall to about 5–5.5% by year-end 2026 once Trump replaces Powell in early May with a 'yes man,' and he reads Bessent's plan to merge Treasury and Fed operations as a setup that could lead to yield curve control if the 10-year note pushes above 4%.
  • Hemke says the February 2025 Oval Office signing of the sovereign wealth fund executive order — and the remark that they would 'monetize the asset side of the balance sheet' — was the seminal moment that took gold from $2,700 to roughly $4,300 and is the foundation of his 2026 macrocast.
  • He is bullish that gold, silver and copper will print more all-time highs in 2026, even though he doubts another 60%+ annual gain; he points to the highest-ever monthly, quarterly and annual closes across all three metals as the long-term chart signal institutions are following.
  • Hemke blames the recent lag in mining shares on 'tax gain selling' by investors who didn't want to pile 2025 gains on top of a strong year, and he expects Q4 production reports over the next week or two to reignite the producers.