There’s seemingly no place to hide. The market and tech stocks are getting crushed, Bonds are getting crushed, and Crypto is getting crushed. Everyone is trying to hide out in oil stocks, but I think that trade is crowded, and pretty soon, they are also going to get crushed! So what to do? There are some tech stocks I like, but there’s no way I’m going to step in front of a broken market, so I’m waiting on those.
Whilst everything else is getting the kibosh, GOLD is starting to show some signs of life. It’s beginning to consolidate and could even be putting in a higher low for a move higher!
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Stocks are down, Bonds are down, Crypto is down. Have a look at this chart:
This year would be the worst year in Bonds by FAR! And I think the Oil trade is close to an end. But Gold is holding relatively steady throughout this market panic. Here’s A Chart:
Notice that Gold has actually been consolidating throughout this market panic and looks to be putting in a higher low.
High inflation is theoretically good for gold, and I’m actually surprised that gold hasn’t moved higher already. You see when inflation bites Gold has throughout history, held its value and gone up in price.
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The Fed
When the Fed prints a lot of money, usually the price of gold goes up. Historically, gold has been an inflation hedge, as we saw post-2001 and post-2008. This time around, post-Covid, a lot of the money hedging inflation went into Bitcoin, but when war broke out in Ukraine, Gold showed itself to be the true flight to safety trade, at least for a while.
With inflation numbers surprising central banks all around the world, now could be the perfect time to make a trade in the metal. I think it can go much, much higher. And if inflation starts to get out of control, watch out, there could be a really large long-term move here, as people realize Bitcoin might not be the real inflation hedge after all.
Now, I’m not looking to trade the price of gold itself, but rather am looking at gold producers. If the price of gold goes higher, that will increase the bottom line of gold miners as they will receive higher prices for the products they sell, all else being equal; this should send the companies’ stock price higher! GDX is the gold ETF and consists of companies such as Newmont Corp (NEM), Barrick Gold Corp (ABX), and Newcrest Mining (NCM). I’m stalking GDX right now for an entry, but there is one other gold stock I really like as well, and that’s Yaman Gold (AUY).
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Yamana Gold (AUY) has gold mining projects in Canada, Brazil, Chile, and Argentina.
Yamana Gold (AUY) is holding well above the 200-day moving average (MA) and looks relatively strong. It’s a relatively low-priced stock at around $5, so we could see some large percentage moves here.
As Always, I will let subscribers know when I’m ready to pull the trigger on this possibly Epic Gold Trade.
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