One way for investors and traders alike to make consistent profits is to simply follow trends. If a stock is going up, it may be worth buying for further gains. As long as you’re out by the time the trend ends, you can lock in some gains.
Many see energy as a continued winner, given how energy stocks fared last year. But oil prices peaked last spring, and could fall with a slowing economy. Yet one commodity continues to quietly rise…
That commodity is gold. The yellow metal is at a seven month high. And it only posted a slight loss for 2022, beating out stocks and bonds as an asset class.
Concerns over lingering inflation could cause demand to rise for gold. Or fears that central banks will cut too early, and inflation will come roaring back.
That bodes well for several potential plays in the gold space. The best way to play a price spike higher is with gold mining stocks. The VanEck Gold Miners ETF (GDX) lost nearly 9 percent last year. But it’s trending up now.
The fund owns positions in the largest gold miners, so it doesn’t have the political or operational risk of any single gold mining play.
Action to take: Those who see a further rise in gold prices may want to consider adding shares of the fund.
For traders, the June $35 calls, last going for about $1.85, offer a leveraged exposure to a jump higher in in gold in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.