In this KE Report Daily Editorial, we’re joined by Craig Hemke, founder and editor of TFMetalsReport.com, for a timely and wide-ranging discussion on the intersection of geopolitics, precious metals, the US dollar, and mining equities.
We kick things off with the surprising market reaction to US missile strikes in Iran – including the sharp reversal in oil prices and the perception that escalation may be de-escalating. Craig explains why weekend geopolitical events often produce less market volatility by the time trading resumes, and how this specific event might mirror the short-lived Israel-Iran tensions from late 2024.
We then shift focus to the precious metals markets, where:
- The US Dollar Index hovering at 98 is acting as a pivotal level. A breakdown toward 96 could serve as a tailwind for both gold and silver, with gold already consolidating around $3,400.
- Craig sees signs of a summer rally for precious metals, especially if the dollar weakens further.
- Silver backwardation and contract rollovers are creating short-term volatility, particularly with July contracts nearing expiration.
- A strong monthly and quarterly close for silver could set the stage for a technical breakout.
On the mining equities side:
- Craig notes Newmont (NEM) is up ~50% YTD but still lagging more efficient operators.
- He expects a positive Q2 earnings season for miners, driven by significantly higher average gold and silver prices.
- However, not all equities will benefit equally. Craig emphasizes focusing on companies with low all-in sustaining costs, wide margins, and disciplined cost controls.
- He also sees last week’s weakness in GDX as potentially related to NYSE options expiration and short-term oil price fears—not a broader trend reversal.
We also preview Fed Chair Powell’s congressional testimony and the mixed signals from the FOMC dot plot, as well as the uncertainty created by potential tariff reinstatements under Trump.
Follow Craig’s work at TFMetalsReport.com