Craig Hemke at Sprott Money stated that gold and silver price lows for 2026 are likely already established following a four-month period of weakness. The precious metals experienced pressure after the Iran War caused inflation expectations and rate hike projections to rise, with crude oil surging from $65 to $110. Hemke's analysis indicates the market hit 'Peak Hawkishness' in the days immediately following the June FOMC meeting. With hostilities largely ceasing last month and crude oil prices returning to $68, Hemke believes the fundamental drivers of the long-term rally will resume supporting precious metals prices.
Iran War Drove Crude Oil from $65 to $110 Before Retreat to $68
Hemke noted that 2026 began with expectations of additional rate cuts from the Federal Reserve. "Price inflation was continuing to slow from the highs of 2022, and it was expected that the Fed and whoever was chosen to replace Jerome Powell would begin to cut rates by mid-year, with perhaps as many as two fed funds rate cuts by year end," he wrote. "That all changed with the onset of the Iran War and the sharply higher energy prices that came with it."
After the Iran War began, crude oil prices surged from $65 to $110, dragging inflation expectations higher. With the cessation of most hostilities last month, crude oil prices returned to $68, near pre-war levels.
Energy Component of CPE Spiked 21% from March to May
"Accordingly, the energy component of the CPE (the Fed's favorite inflation measure) spiked 21% from March to May," Hemke pointed out. "But now that the crude oil price is back to pre-war levels, why shouldn't we expect a sharp drop in the months ahead?"
Hemke stated that as inflation concerns ease, the risk of Fed rate hikes will continue easing as well. "Though a symbolic hike is still possible in the months ahead, it's quite likely that Fed policy will soon shift back to what Warsh was originally selected to produce, namely rate cuts that allow for lower net interest costs and negative real interest rates," he said. "If I'm correct about this, the gold and silver price lows of late June are very likely to be the price lows of 2026."
Hemke Identifies 20-Day Moving Average as Key Technical Indicator
Hemke cautioned that he is not expecting a sharp V-shaped recovery in gold and silver prices. "The chart damage has been significant as prices remain in a technically-bearish configuration and below all of the key moving averages," he said. "Simply moving sideways from here can run out the clock of the bearish indicators and begin to shift sentiment, and that's what I'm expecting for a while."
Hemke suggested investors watch the 20-day moving average for clues about precious metals' price direction. "If/when gold and silver move back above this initial trend indicator, you can begin to grow in confidence that the lows of the year are behind us."
"In summary, with the Iran War ending and energy prices falling, the second half of 2026 is likely to see CPI and PCE price inflation that comes in below expectations," Hemke wrote. "This will signal that 'Peak Hawkishness' has come and gone and that gold and silver investors can soon get back to focusing upon the fundamentals that had driven prices higher in 2024 and 2025."
FAQ
What did Craig Hemke say about gold and silver price lows in 2026?
Craig Hemke at Sprott Money stated that the gold and silver price lows of late June are very likely to be the price lows of 2026, following a four-month period of weakness caused by the Iran War and elevated inflation expectations.
Why did gold and silver prices experience weakness in recent months?
Gold and silver prices experienced weakness after the Iran War caused crude oil to surge from $65 to $110, which drove inflation expectations higher and increased projections for Federal Reserve rate hikes. The energy component of the CPE spiked 21% from March to May during this period.
What technical indicator does Hemke recommend watching for precious metals recovery?
Hemke suggested investors watch the 20-day moving average as a key indicator. He stated that if gold and silver move back above this initial trend indicator, investors can begin to grow in confidence that the lows of the year are behind them.
