The surge in oil prices from $65 to $110 following the outbreak of hostilities forced the Federal Reserve into a defensive stance, abruptly ending hopes for early-year rate cuts. However, as crude oil prices have returned to the $68 range, the inflationary pressure that dominated the second quarter is beginning to dissipate. Hemke notes that the energy component of the Fed’s preferred inflation gauge spiked 21% between March and May, a figure he expects to drop sharply in the coming months.

While the prospect of symbolic rate hikes remains, the policy trajectory is likely to pivot back toward supporting lower net interest costs. Investors should not anticipate an immediate V-shaped recovery, as current price action remains technically bearish and anchored below key moving averages. Hemke suggests a period of sideways consolidation will be necessary to repair chart damage and shift market sentiment. He points to the 20-day moving average as a critical threshold; once gold and silver reclaim this level, it will serve as a primary indicator that the year's lows are firmly behind them.