Adam Hamilton: Gold Cracks Below $4,000 Buy Signal or Trap?
Hamilton attributes the breakdown to a combination of factors, including a hawkish tone from new Fed Chair Kevin Warsh that fueled rate hike expectations and a stronger dollar, as well as a New York Times report about potential joint US-Israel airstrikes on Iran. He describes a "backward war trade" in which geopolitical escalation raises oil prices, which in turn lifts inflation expectations and Fed rate hike odds, boosting the dollar and pressuring gold. Despite this, Hamilton views the selloff as overdone, noting gold's strong seasonal winter rally period from late October to late February and the fact that gold miners remain wildly profitable with trailing P/E ratios of 11 to 13 times earnings, the lowest valuations he has seen in his career.
For investors, Hamilton emphasizes that gold allocations among Western investors are vanishingly low at roughly one third of one percent of S&P 500 market capitalization, suggesting significant upside potential if allocations merely rise to one or two percent. He identifies the AI bubble as the biggest risk to stock markets, which could temporarily drag gold down in a panic but would likely be followed by a strong rally. Hamilton remains bullish on gold long-term, viewing current levels as a bottoming process and recommending a minimum five to ten percent gold allocation in prudent portfolios.
00:00:00 - Intro: Adam Hamilton on Gold Markets
00:00:34 - Gold's Breakdown Below $4,000
00:03:26 - Potential Catalyst for Gold Plunge
00:06:50 - Anomalous Backward War Trade
00:10:29 - France's Debt Crisis Impact
00:12:15 - High Rates as Gold Tailwind?
00:16:19 - Gold Seasonality and Tax Loss Selling
00:18:27 - Gold Miners' Profitability at $4,000
00:21:16 - Risk of Diesel Shortages for Miners
00:23:28 - Who's Buying at Oversold Levels?
00:25:59 - Fed Rate Cuts: What Would Trigger?
00:28:06 - Midterm Election Impact on Trump
00:30:05 - Biggest Market Risks: AI Bubble
00:33:40 - Adam's Products and Contact Info
Guest
Adam Hamilton
Founder of Zeal LLC.com
Adam Hamilton founded Zeal LLC in early 2000. He started investing in stocks when he was 12 years old, using money from summer jobs. He grew up fascinated by stock markets, dreaming of making a living in this unique realm where compensation is not limited by time on task like most other professions.
After growing up in a small-town banking family in rural North Dakota, Adam left for school at the University of Colorado at Boulder. While watching the markets and trading, he studied finance, accounting, and entrepreneurship. Adam went on to be a Big Six CPA and consultant after graduation, never stopping learning.
By early 2000, Adam finally had enough experience and capital to found Zeal at 25 years old. Rather than hide his research and trading work in a hedge fund, Adam wanted to help others thrive in the markets. So he started sharing his now-world-famous market research work through very-affordable newsletters.
Customers raved, and many millions of dollars of newsletter sales later Adam was blessed to become a self-made millionaire. He is very thankful to be living his dream, and plans to research, trade, and share wisdom through newsletters for the rest of his life. Adam is a Christian saved by Jesus Christ. He and his wife are greatly blessed with 2 children, and they live in Colorado.