Streible Sees Gold and Silver Bounce as Fed's Hawkish Stance Fades

Phil Streible, chief market strategist at Blue Line Futures, is optimistic about gold and silver despite the recent dip. He believes the pullback was a setup for the next leg up, rather than a top. The Federal Reserve's hawkish stance under Chairman Jerome Powell was the catalyst for the decline, but Streible thinks this will ultimately lead to a policy mistake that needs to be reversed.

According to Streible, the Fed's rate hikes are designed to crush demand, but they don't address supply shocks like higher oil and wheat prices. He sees gold accelerating when the inflation the Fed is trying to combat turns out to be the wrong kind. The market has factored in the Middle East risks, and now it's moving more on energy prices, policy error risk, and data than on new drone alerts.

Silver remains the higher beta trade with a deficit that makes it difficult for supply to keep up with demand. Streible likes the long side of both metals and sees opportunities in physical metal, futures, ETFs, and miners. He's not calling a top because gold gave back $150 after a $600 run, but rather trimmed into resistance and is putting toes back in the water.

Streible watches key levels on silver, including the 50-day moving average near $62.68 and the 100-day moving average at $73.65. He believes gold could reach $5000 if inflation shocks fade and the Fed admits its footing isn't firm. Seasonality is also a positive factor, with August strength showing up in 13 of the last 15 years.