Skip to main content

Craig Hemke – The Precious Metals Market Has Hit “Peak Hawk”

The KE Report Jun 30, 2026

Summary

Craig Hemke argues peak hawkishness has passed: falling crude oil should pull inflation readings lower and force the Fed's rate-hike expectations back down.

He calls the break below the 200-day moving average (a long-term trend line) a piling-on effect, not the end of the bull market.

Hemke expects gold to end 2026 roughly flat, arguing a sideways correction through time can lift price back above falling moving averages.

Real interest rates — returns after inflation — drove gold's fall, he argues, and the return to negative real rates will push it back up.

Miners still produce gold far below spot prices, so Hemke sees the share sell-off as a chance to add before the second half.

Danielle DiMartino Booth's takeaways

  • Top takeaway Cited by Hemke as having once endorsed his view that the Fed's three-week lag in releasing FOMC minutes lets the central bank watch the market reaction and adjust the minutes if it did not get the response it wanted.

Kevin Warsh's takeaways

  • Top takeaway Chaired his first FOMC meeting about two weeks before the recording with a message focused on price stability, helping swing fed funds futures from expected rate cuts to pricing one to two (possibly three) hikes in 2026.
  • Scheduled to speak Wednesday morning at the ECB Forum on Central Banking in Portugal, where Hemke will watch whether he reaffirms the hawkish hold, dials it back, or goes further.
  • Hemke likens the speech, coming two weeks after Warsh's press conference, to the FOMC minutes lag and suspects he will 'revise and extend' the message based on the market reaction.
  • Hemke argues any initial hawkish hike under Warsh would be posturing, with falling energy prices set to soften inflation data and push the Fed back toward the dovish direction it has historically taken.

Craig Hemke's takeaways

  • Top takeaway Argues 'peak hawk' is in: the Fed-driven correction likely ended with gold's break just below $4,000 long-term support, though he expects the metals to chop sideways rather than snap straight back up.
  • Sees 2026 ending roughly flat, with a rally back to about $4,500 gold leaving only a 2-3% annual gain after gold rose 24% in 2024 and roughly 46% in 2025, and silver about 140% last year.
  • Maintains the debt-math thesis: with roughly $2 trillion now added to US debt every year, money printing and dollar debasement should carry gold from $4,000 toward $8,000 and eventually $16,000.
  • Expects crude's slide back to about $70 to pull PCE and CPI below expectations, leading the Fed to abandon hike plans, with a return to negative real rates as the trade that pushes gold back up.
  • Sees an attractive moment to add mining shares for the second half of 2026 and 2027, with miners getting gold out of the ground at roughly $1,500-1,910 per ounce and still booking large profits.

Shad Markowitz's takeaways

  • Top takeaway Contends a flat 2026 is still a win: after gold rose 24% in 2024 and roughly 40-46% in 2025, a sideways year keeps most of a roughly 60% two-year gain and matches gold's 9-10% long-run annual average.
  • Points out that gold, GDX, GDXJ, silver, SIL and SILJ are all below their 200-day and 50-week moving averages and asks whether January-February marked the bull market's top.
  • Flags the flattening yield curve, noting the Fed drives the short end around the 2-year yield while the market sets the 10-year and beyond.
  • Argues real interest rates will return to negative territory over time, as they historically do, and that markets will be caught off guard when it happens.
  • Notes Q2 margins for miners are on track to be among the fattest the sector has ever recorded in nominal terms and says he is eager for the upcoming earnings reports.