I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.

Will interest rates go lower at the next Federal Open Market Committee (FOMC) meeting on September 16? When that happens, typically the U.S. dollar goes down and gold goes up.

Gold has been on a thunderous rally this year, climbing to record highs at times in the face of uncertainties relating to geopolitical tensions and U.S. tariffs. Gold is often considered a safe-haven investment, particularly during times of economic uncertainty and inflation. In my opinion, this rally will resume and continue until the end of the year. 

I have a daily chart below that shows gold futures trending higher. A monthly gold chart shows six waves up, which is truly a bull market. 

A trade strategy would be sell two October gold 31.50 puts for $700 each ($1,400). With that money buy December gold 3,600 call for $3,200. This strategy will cost you $1,800. The maintenance margin on Comex gold futures is $15,000 per contract.

The October puts you are selling expire September 25. Notice the low on May 15 at 3,178. In my opinion, 3.200 will hold so selling the 31.50 put should be a safe play. The objective is to let the October puts you sell expire worthless. You will be left with a December gold 3,600 call. Even if gold goes to 3,400 or 3500, you will have a nice profit. 

If you want to discuss strategies, please contact me.

Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878 2391 
Toll Free 800 556 9411
sdavis@walshtrading.com  
www.walshtrading.com

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