• Skip to main content
  • Skip to primary sidebar
  • Markets
  • Trade Ideas
  • Reflections
  • Links
  • Trading Program
    • Spec Model Trading Manual
    • Spec Model Trades
    • Spec Model Positions
  • Income Model
    • Income Model Trading Manual
    • Income Model Trades
    • Income Model Positions
  • Watch List
    • Watch List: Spec Long Plays
    • Watch List: Spec Short Plays
    • Watch List: Income Plays
  • About
    • Privacy Policy
    • Terms of Service
    • Terms of Participation

Zach Scheidt

Helping families build wealth so they can focus on what really matters

Time for Gold to Rally!

June 16, 2022 at 12:37 pm by Zach Scheidt

gold rally

I drove over 950 miles round trip for a conference this week.

And it seemed like everywhere I turned, prices were out of control!

Of course gasoline is hitting record highs. But when you tack on tolls, a hotel room, parking and travel meals, the cost for the trip borders on outrageous!

Inflation is the theme of the day — from Wall Street to Main Street. Investors and consumers are both scrambling to protect themselves.

And today I want to explain why gold may finally be living up to its reputation as an inflation hedge.

Two Challenges for the Gold Rally

While official inflation measures have been hitting multi-decade highs, gold prices have been relatively dormant.

That’s not good for anyone expecting gold to help protect their wealth from inflation.

Can gold rally as inflation rises?

There are two primary factors that have kept gold from acting like it traditionally would during times of inflation.

First, the U.S. dollar has actually been quite strong. Just look at how the greenback has been holding up against other world currencies.

The U.S. dollar has delayed gold's rally

This is largely because global investors have seen the dollar as a safe place for parking capital. And so far, the U.S. Federal Reserve has been more hawkish on interest rates than other central banks.

(When the Fed causes rates to move higher, it makes the U.S. dollar more attractive because investors can get higher yields.)

A second challenge to gold has been the belief that cryptocurrencies will replace the functionality of gold. Some have even called these tokens “digital gold.”

But cryptocurrencies certainly haven’t fulfilled this functionality.

At a time when inflation is raging, Bitcoin and other cryptocurrencies have been plunging. So much for a storage of value!

As Pressures Ease, Gold Could Surge

Lately, both the dollar strength and crypto replacement thesis have been called into question.

Other central banks like the ECB and the Swiss National Bank made headlines this week by hiking their own interest rates.

As international rates move higher, global investors have more options around the world. So higher overseas rates is already putting pressure on the U.S. dollar.

Meanwhile, Bitcoin just can’t seem to find support. And some iconic investors have gone on the record stating that Bitcoin could drop another 50% from current levels.

All of this bodes well for gold prices. And in a market where many other assets are falling, gold has started to outperform.

Inflation concerns are widespread.

The Fed has been unable to prove that it can reverse the tide.

And investors are desperate to find ways to protect their wealth.

I expect the recent stability for gold to lead to sharp price gains in the second half of this year.

And as we’ve discussed, there are plenty of great ways to profit from this trend.

Stalking Gold Plays With our Put-Selling Income Strategy

As I write this alert, my put-selling income program currently has two gold positions in play.

I’m looking to add more exposure over the next few weeks.

For those who don’t know, this put-selling program has a unique strategy.

We sell put contracts on stocks that I believe are set to trade higher. By selling these contracts, you’re entering an agreement to buy shares of stock at a certain price — within a certain timeframe.

Investors who sell put contracts receive an up-front payment in exchange for that agreement.

If the stock holds its ground or trades higher, that agreement can expire. This means you don’t have to buy shares of stock and you keep the income you’ve received from selling the put contract.

If the stock trades lower, you may be required to buy shares at the agreement price. (This is why you should only sell put contracts on stocks that are attractive enough to buy.)

Alternatively, you can “buy out” of your agreement by re-purchasing the put contract you originally sold. Depending on where the market is trading, you may buy out at a profit or at a loss.

For more information on how this strategy works — and the stocks we’ve used with this approach — check out my put-selling model.

Regardless of how you set up your tactical trades, I believe precious metal investments deserve a spot in your brokerage account.

Here’s to growing and protecting your wealth!

Zach

(Trade procedure: 5 minutes after this notification posts, I will enter the trade on my brokerage platform. Once filled I will edit this post to include execution prices.)

Please note: I am placing these trades in my own account. And while I notify the group of all trades 5 minutes before I place my own personal trades, this creates a conflict of interest. Please review all disclosures and agreements included with your subscription packet.

Filed Under: Markets, Public Tagged With: gold, gold stocks, inflation, put selling

Primary Sidebar

Get your FREE copy of my watch list




You’ll also receive my (almost) daily market insights — you can cancel at any time.

when to sell your stock

How to Know When to Sell Your Stock

It’s exciting to pick out a new stock to buy. But the best investors start with a plan for when (and how) to sell their stock.

stock market is bad

The Stock Market is So Bad, It’s GREAT!

I’m kicking myself for not being better prepared. The stock market is so bad, it’s primed for a big-time rally!

gold rally

Time for Gold to Rally!

The gold rally has been held back by two important factors. But now that these two challenges are going away, gold could surge!

share buybacks

Terrible Timing to Stop Share Buybacks

A bear market is a terrible time to stop share buybacks. But some companies are using this opportunity to build shareholder value!

official bear market

What I’m Watching as an Official Bear Market Looms

Stocks are just a couple percentage points away from official bear market territory. Here’s how I’m positioned heading into next week.

Hated homebuilder stocks

I’m Bullish on Hated Homebuilder Stocks

Shares of hated homebuilder stocks are lower this year. But this area offers tremendous value that could lead to gains this summer!

stock market new season

Can the Stock Market Shift to a New Season?

After seven straight weeks of losses, the stock market may be shifting to a new season. Here’s why I’m optimistic about the week ahead.

good stocks fall

Why Good Stocks Fall

Good stocks fall when investors need cash (and have no options left). That’s good news and points to a rebound in sight!

value stocks outperform

April was Brutal — But There Are Still Winning Stocks

Stocks fell in April — booking the worst month for the Nasdaq since the dot-com crisis. But despite the carnage value stocks outperformed

Stock Market Indicator

This Stock Market Indicator Points to a Bounce

There’s a lot of fear in today’s market. But despite the selling, one stock market indicator is signaling a bounce!

Three reasons to buy Meta

Three Reasons to Buy Meta Ahead of Earnings

Facebook’s parent Meta Platforms is scheduled to release earnings this week. Here are three reasons I chose to buy Meta ahead of the report.

Investors are buying stock insurance

Investors Buying “Stock Insurance” – Here’s How to Profit

The price for “stock insurance” — or put contracts that protect investors’ wealth — is rising. Here’s how to use that to your advantage!

Barbell Approach

For Stronger Investment Returns, Use THIS Barbell

Splitting your investment account into a “safe” portion and more “aggressive” positions can help to manage risk and improve returns.

This Market is FULL of Great Investment Plays

There is no shortage of opportunity in today’s market. But you have to know where to look for the best investment plays.

Quarterly Trading Update

Quarterly Trading Update — March 2022

Now that the first quarter is over, I wanted to share an update on how our trading models performed.

DISCLAIMER: Stocks and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the stocks and options markets. Don't trade with money you can't afford to lose.

This is neither a solicitation nor an offer to Buy/Sell stocks or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this page. The past performance of any trading system or methodology is not necessarily indicative of future results.

All trades, patterns, charts, systems, etc., discussed on this page are for illustrative purposes only and not to be construed as specific advisory recommendations. Information contained on this site or in any correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Arete Publishing, LLC · Copyright © 2022 · All Rights Reserved
Privacy Policy · Terms of Service · Terms of Participation · Log in