Craig Hemke – Fed Rate Cut Expectations Have Become The Prime Mover In Gold, Yet Silver Still Follows The Dollar
Craig Hemke, Founder and Editor of TF Metals Report, joins us to outline how Fed rate cut expectations continue to be the key input factor for gold pricing, while silver and the other metals continue to follow the moves in the dollar. With gold mostly holding above $2,000 since mid-November to present, it is an encouraging level to be basing at, but it won’t start to really break out of the tight range it’s been in until we see more conviction in the Fed actually cutting rates. We talk about the coming GDP data and upcoming Fed meeting later this week, but he doesn’t expect much to come of any of it.
Silver is had been trading near it’s long-term support at $22, without much direction either way, but has been popping higher lately, along with most commodities, as the dollar weakened. With regards to COT readings, Craig makes some interesting observations on the open interest from hedge funds and speculators versus the banks, that have some potentially constructive outcomes in the near-term to medium-term for silver. We also point out that the GDX is far more closely correlated to the silver price than the gold price, and so a breakout in the lessor precious metal, would also be good for the gold and silver mining stocks.
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Gold is doing just fine, and still up near all-time highs, after putting in the highest weekly, monthly, quarterly, and annual closes to end 2023. Whether that buying in coming from high levels of central bank buying or large amounts of retail buying in physical bullion as Jeff Christian outlined recently (including impulse buys from retail shoppers at Costco or Walmart, or the collecting of “gold beans” phenomenon in China), there has been a strong bid in gold.
>> The issue dragging sentiment down is the more speculative gold equities and silver equities have been in a corrective move, and yes, most generalists have been off chasing big moves higher in other sectors like AI, cryptos, or growth stocks. There has been no real reason for generalists to consider getting into gold or silver stocks.
As for the catalyst for the breakout…. many are pointing to when the Fed actually cuts rates as the trigger. Others have mentioned a breakdown below 100 in the US dollar in 2024 as another tailwind for the PM sector. We’ll see if that happens later this year…
The technological changes being wrought by man are not science fiction anymore they are reality. In Invaders from Mars a 3-D film made in 1953, man lives in a World where no one will listen, a world in which the individual must fall back on his own resources to defeat the forces of evil. Does this sound familiar, if it does you are living in The Twilight Zone! DT
People should not discount gold, phyz….. just yet,,, .. JMO
No doubt bit coin has stolen the thunder … with the New ETFs….
Phyz gold , is less likely to be stolen from your “wallet”… 🙂
Just watch how fast the algo/machines at the comex get unplugged when Gold breaks out hard, fast and unexpectedly to the up side……..
Retail investors are so sick of PMs, especially with bitcoin doing well. There is just no catalyst for gold.