GDX is a strong long-term investment; the recent decline from $117 to ~$100 presents a buying opportunity driven by structural macro factors like inflation and debt.

I remain very optimistic about gold, and not just physical gold, but gold mining companies, which leads us to the VanEck Gold Miners ETF, code “GDX”.

This is interesting because gold mining companies were actually one of the strongest sectors of the market in August. GDX made gains of around 30 percent or more in August, but we have seen a decline since then .

"GDX" fell in recent days by 4% at the end of August, by another 1.5% on the last day of August , and by about 4% on the first of September.

And the reason for that is wonderful. The same thing that is currently causing concerns about stocks is temporarily putting pressure on gold: rising interest rates. Why is gold falling despite geopolitical risks?

Normally, you might think that tensions between the United States and Iran are increasing, so let's buy gold. And sometimes that's exactly what happens. But the market is currently focused on a series of different interactions.

Tensions with Iran are driving up oil prices. Rising oil prices increase the risk of inflation. Higher inflation increases the likelihood of monetary policy tightening by the Federal Reserve.

This drives up yields and the dollar. Higher real yields and a stronger dollar could put pressure on gold. Gold fell to a three- week low around September 2, as a stronger dollar and renewed inflation fears outweighed the safe-haven effect of the US- Iran standoff.

I think this is important because it tells us that the gold thesis has not necessarily disappeared. We are witnessing a tug-of-war between the demand for safe havens and the pressure of high interest rates.

So, why do I love "GDX"? Remember that "GDX" is not gold. It is an exchange- traded fund that owns a basket of gold mining companies. Mining companies can provide operational leverage for the price of gold.

If the cost of production for a mining company, hypothetically speaking, is $2,000 to produce an ounce of gold, and the price of gold rises from $3,500 to $4,000, then the profits of mining companies increase by only 14%. The profit

After the massive surge in August, I am quite pleased to see some of that enthusiasm waning in trading. The GDX index peaked at $117 in the first quarter, and today it is settling at around $100.

It's down by about 10%, which is a great time to think about adding, even after the big rally we saw in August.

So , what is my long- term thesis for the GDX index? For me, it's not about Iran fighting the United States, so we should buy gold. This is very short-sighted thinking, and I hope it ends soon and does not change my thesis in any way .

My thesis is much broader than that. We have persistent inflation risks , a massive government deficit , a federal debt exceeding $40 trillion, and geopolitical uncertainty. Questions about the long-term purchasing power of the currency.

Central banks' demand for gold. I mean, the list is long. But at the same time, mining companies could benefit enormously if gold prices remain structurally high.

So, after a huge August, I'm not chasing GDX. I'm waiting for the setbacks, and finally we're starting to see one. A pullback that I believe is healthy for continuing the climb towards new all- time record levels.

So, how do I deal with this? I choose to use an options strategy by selling a cash-covered put option, to generate income, hoping to get a lower price. Looking here, you can see an options trade alert within my options community , where I sold a cash-covered put option on GDX.

The expiry date was October 16th with an execution price of $85. In return, I collected $1.55. So, this means I collected $155 per contract in this particular deal. If GDX falls below $85, I will gladly buy it at those specified levels.

However, there are other opportunities. I believe gold is a great investment option, especially mining companies, and for me that would be an investment in the GDX fund. And that is indeed my approach as we delve deeper into September.