Craig Hemke – Markets Drop, Precious Metals Follow: What Comes Next?
Craig Hemke, editor of TF Metals Report, to dissect last week’s sharp market selloff and its impact on precious metals. While gold and silver had been climbing steadily through Q1 – gold even up nearly 20% – they were not immune to the broad pullback, with both metals reversing sharply alongside global equity markets.
Key topics discussed:
- The market-wide selloff and its ripple effect on gold and silver.
Craig explains how liquidity needs and portfolio rebalancing by large funds contributed to the drop – even as fundamentals for precious metals remain intact. - Historic parallels and sentiment shifts.
Craig outlines similarities to past corrections and why this could be another consolidation before a rebound. - Q1 earnings vs. market reaction.
Despite record-high margins and profitability for gold producers, investors remain hesitant. Craig shares why generalist interest hasn’t stuck – and whether this quarter’s blowout numbers will matter. - The frustrating disconnect in gold stocks.
Gold is up almost 100% since 2022 lows, yet many miners are still well below 2020 peaks. We explore what’s holding them back: lack of growth, muted capital returns, and sector-wide neglect. - Commitment of Traders (COT) report insights.
Craig gives a preview of what the upcoming COT report may reveal about speculative positioning – why we might be nearing a reset point for the next leg higher.
- Long-term outlook for miners and strategy moving forward. With major producers sitting on strong balance sheets, M&A could heat up. Craig encourages a stock-picking approach: identify well-positioned juniors near large players rather than broad ETF exposure.
There are several world reserve currencies but the USD is senior amongst them. It’s share of that pie peaked in 2000 at over 71%. As of 2020 it was 59% which is similar to 1980 and 1960.
The USD’s position was summed up accurately by Treasury Secretary John Connally in 1971:
“The dollar is our currency, but it’s your problem.”
Real wages in the US have been sliding lower for the last 50+ years but will go off a cliff should the USD ever lose it’s senior reserve currency status.
DT – The problem is the Eurodollar (not the currency pair), e.g. over 90% of GFC bailout money went to non-USA banks. The Eurodollar accounts for much of the world’s Dollar supply. BDC
Something tells me that Q1 quarterly gap in NYSE:Gold will stay open for many years…
https://stockcharts.com/h-sc/ui?s=%24NYA%3A%24GOLD&p=Q&yr=50&mn=0&dy=0&id=p83999649386&a=1437190030&r=1744063908158&cmd=print
Strong currencies hollow out an economy such as what has happened in the US. It makes imported manufactured goods from other countries cheaper, overtime the manufacturing leaves the country with The Worlds Reserve currency and offshores to countries with cheaper labor. It takes decades if ever for industry to return and that is if you do everything right. Trump’s tariffs won’t work because you can’t turn something around that started in the 1960’s in just a few years it takes decades. DT
What you are trying to say is,
You can’t make a silk purse out of a sow’s ear.
Trump knows it but somehow must keep the masses motivated, while bringing down the empire and positioning the US where it can prosper in a different world.
On a recent Substack missive, friend of the KER show, Peter Boockvar, recommended this X/Twitter post from Shay Boloor.
After reading it over, I do feel it is a very well-reasoned written response to the Trump administration as far as their tariff policy rolled out last week. He points out how resetting international trade could have been handled better and with more clear objectives, and the erroneous assumptions in their current strategy. It brings up a number of important macroeconomic considerations for global trade, incentives for US manufacturing, squaring up trade deficits in a more rational manner, and just takes a more measured approach to how this could be implemented more successfully.
>> I’m encouraged that his post has had 2.5 million views and it is worth the quick read:
_________________________________________________________________________
Shay Boloor @StockSavvyShay 6:04 AM · Apr 5, 2025 – X/Twitter
MY OPEN LETTER TO PRESIDENT TRUMP
Just to provide a few segments from the post for those that have link clicking avoidance…
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“The frustrating part is that I was on board for a reset. Truly. I’ve said it publicly. I’ve written about it in this very feed. I understood the need for a detox. For decades, the U.S. economy played the part of the rich guy at the table — picking up the check for a global order that no longer worked in our favor. We hollowed out our industrial base. We enabled unfair trade imbalances under the illusion of diplomacy. We subsidized demand for cheap imports while outsourcing the hard questions about how our domestic workforce would adapt.”
“Eventually, that had to stop. It was unsustainable — financially, politically, and morally. We couldn’t keep pretending that a consumption-led economy held together by zero-interest rates and global fragility was a long-term solution. I wanted a rebalancing. I welcomed the idea of a harder, smarter America-first policy that pushed for fair treatment, reciprocal agreements, and a real industrial strategy rooted in technological superiority, national security, and capital formation. That would’ve been leadership.”
“But that’s not what this is.”
“What you’ve rolled out isn’t detox — it’s whiplash. This isn’t strategic decoupling. It’s scattershot retaliation dressed up as reform. There’s no roadmap. No operational playbook. No clear articulation of where this ends or what the metrics of success even are. It’s not an attempt to responsibly unwind America’s role as the global shock absorber — it’s a brute-force attempt to disorder the existing system with no viable alternative in place.”
“You can’t replace a fragile supply chain with chaos and call it resilience. You can’t build American industry by torching the scaffolding that underpins capital flows, labor mobility, and global coordination — especially when the U.S. itself no longer has the domestic capacity to meet its own industrial needs. You talk about bringing jobs home, but the U.S. doesn’t have the labor force, permitting structure, or wage flexibility to stand up full-scale manufacturing at speed….”
“Capital isn’t going to rush to fill that void just because you raised tariffs. It’s going to wait. It’s going to sit on the sidelines and preserve optionality. Because right now, no CEO can confidently model a five-year capex plan. No board can greenlight supply chain onshoring when they don’t know whether a tariff rate will double next quarter based on your Twitter account or some arbitrary trade deficit formula. And in the absence of credible structure, capital is retreating — not realigning.”
“I was ready to endure the pain of a thoughtful, structured reset. Most long-term investors were. We’ve lived through tightening cycles. We understood that globalization, as it stood, had reached a breaking point. But this isn’t a correction of imbalances. This is a rupture without scaffolding.”
“What you’ve created isn’t reindustrialization. It’s an intentional sabotage of capital planning. No executive is going to build a factory with four-year political horizon risk, a floating tariff regime, and no labor certainty. No investor is going to fund expansion in a market where the basic cost of imports can change weekly based on what country has a current account surplus that week…”
(it goes on from there)
The US needs to dump “The Worlds Reserve Currency” designation. It has built up other countries manufacturing but destroyed America’s industrial and manufacturing base. Give it to the European Union. If only it was that easy! DT