🪙Is Gold the Ultimate Inflation Hedge?

October 09, 2025

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Hello, my friends!

Wall Street is on fire, charging back from April’s tariff-induced meltdown in a rally some are calling "The Great Reversal."

🌊 Markets are riding a wave of optimism, but whispers of caution linger: Are we overheating, or is this bull run just getting started?

🔥 Historically, these trends can gallop for months before showing signs of fatigue.

🌌 Remember, the downside is capped at zero, but the upside? It’s as boundless as the cosmos. 

Gold

One asset is stealing the spotlight, soaring to unprecedented heights with 50%+ gain this year: Gold.

This isn’t just a rally - it’s a spectacle…

Headlines

  • Gold smashes past $4,000, with silver breaking $50 for the first time, signaling a historic surge.

  • Safe-haven demand and bets on Federal Reserve rate cuts have propelled gold to record highs.

  • Amid a prolonged U.S. government shutdown, gold remains a rock-solid barometer of unease.

  • Analyst Ross Norman notes: “Gold gauges when things just aren’t right.”

I rarely dive into commodities - I don’t day-trade it - but how can you ignore those electrifying charts?

This is a moment for the history books. Will gold keep climbing, correct by 50%, or settle into a decade-long consolidation? Only time will tell. At the end of the day, savvy investors are pouring depreciating dollars into gold, real estate, and stocks to combat inflation.

History Lesson: The Gold Standard

Inflation erodes purchasing power, tracked by the Consumer Price Index (CPI). Modern U.S. inflation surged after 1971's "Nixon Shock," ending the dollar's gold convertibility and shifting to fiat currency, enabling easier money printing amid wars and spending.

  • 1970s: The Great Inflation - Oil shocks (1973 embargo, 1979 revolution) and loose policy drove stagflation: high inflation (peaking at 13.5% in 1980) with unemployment. Rates averaged 7-11%.

  • 1980s: Taming the Beast – Fed Chair Paul Volcker hiked rates to 20%, causing recessions but slashing inflation to under 4% by 1983. This restored policy credibility.

  • 1990s-2000s: Great Moderation – Stable 2-3% inflation from better Fed targeting, globalization, and tech booms. The 2008 crisis briefly caused deflation (-0.4% in 2009).

  • 2010s: Subdued Era – Despite massive stimulus post-recession, inflation hovered at 1-2% due to weak demand and low oil prices. Fed set a 2% target in 2012.

  • 2020s: Pandemic Spike – COVID disruptions and $5T stimulus pushed inflation to 8% in 2022, worsened by Ukraine war. Fed's rate hikes (to 5%+) cooled it to ~3% by 2025, nearing target.

Fiat money risks inflation, but independent central banking has kept it mostly in check since the 1980s, though supply shocks remain a threat.

Lucid Update: Decoding The Sharp Ratio

October Results

In the high-stakes world of markets, raw profits tell only half the story. Enter the Sharpe Ratio - a metric for any serious trader.

Over the past week, my Lucid futures trades (MESZ5 and MYMZ5) yielded a net profit of $1,934.75 (Oct 3-8) across four active days. I always scrutinize the Sharpe Ratio to gauge true performance, separating skillful execution from reckless volatility.

Dow Jones Short

Think of it as a comprehensive blood panel for your portfolio. The Sharpe Ratio normalizes returns by the risk endured, exposing whether your gains stem from strategic prowess. In volatile markets, it's your reality check - ensuring consistency trumps fleeting highs.

Here's the breakdown from my recent results:

  • Mean Daily Net PnL: $483.69

  • Standard Deviation of Daily Net PnL: $91.62 Daily Sharpe Ratio: 5.28.

A Sharpe above 1 signals solid performance; above 2 is exemplary. This elevated figure highlights exceptional risk-adjusted returns in this snapshot - driven by steady profits and minimal variance.

👉 If you’d like to join me on this journey, you can use my partner link and discount code: “TDI” to get started.

Newsletter Partners

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Low-cost entry, industry-leading payout cap. Test your skills and scale responsibly. Use code TDI 

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Disclosure: Partner offers. Trading futures involves risk; only trade with capital you can afford to lose. This is not financial advice.

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What’s your founder story? 

Hit reply and tell me - then jump to X to keep the momentum going.

Until next time,
Steve B
Founder, The Daily Impulse

Important Disclaimer:

This newsletter is for educational purposes only and does not offer financial or investment advice. It should not be taken as a recommendation to trade assets or make any financial decisions. Please be cautious and ensure you conduct thorough research or consult with a financial professional before making any investment choices.

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