TG Watkins - Technical Outlook on Gold, Copper's AI Tailwinds, and Small-Cap Headwinds
The KE Report Sep 28, 2026 23:41
Summary
TG Watkins argues gold and GDX need to chop sideways after their historic rally, with both now below their 50-day moving averages.
Copper stays bullish on AI-driven electricity demand, the guest says, until the AI build-out narrative itself starts to fade.
Market breadth plunged from 70% to 20% of stocks above key moving averages, exposing September weakness that flat mega-cap indices hide.
Small caps face a tough mix of seasonality, weak breadth, and rising rates, so the guest favors larger, cash-rich names.
The guest believes crypto's lows are in after an SEC tokenization-rule postponement juiced the market, but he awaits a pullback before buying.
Kevin Warsh's takeaways
- Top takeaway The guest notes Warsh raised rates and argues there is still the possibility of a couple more rate hikes in 2027, so rates have not topped out.
Scott Bessent's takeaways
- Top takeaway The guest recalls Bessent's bond buying program news around August 18-19 giving gold an extra pop beyond the pullback he expected.
TG Watkins's takeaways
- Top takeaway The guest argues the historic rally in gold and precious metals leaves them needing to chop sideways in a range, with GDX and GLD now back below their daily 50-day moving averages.
- He stays bullish copper on AI build-out demand for electricity, computers, and robots, and would turn only when the AI narrative itself fades.
- He describes a K-shaped market: breadth fell from 70% to 20% of stocks above key moving averages while mega-cap indices hold up, and he is in waiting mode, wanting to be bullish.
- He thinks crypto's lows are in and the space is ready to cycle up on the four-year cycle, but he is sitting out until he sees more consolidation and a pullback.
- He sizes down in choppy regimes, picks stop width to match the trade horizon, and expects a strong market once the midterms pass and big money knows where to go.