Traders give three ways to play rising inflation ahead of Fed meeting

Inflation is the talk of Wall Street after last week's red-hot consumer prices report and ahead of the Federal Reserve's June meeting on Tuesday and Wednesday.

No change to rates is expected from the Federal Open Market Committee, though investors will be on the lookout for any commentary as to future action.

Ahead of the meeting, CNBC's "Trading Nation" asked its traders for their best ways to hedge the rise in inflation.

"Gold is a natural trade because negative [real] interest rates obviously really help it, but I think silver is a much better bet," said Boris Schlossberg, managing director of FX strategy at BK Asset Management. "There's a lot of industrial demand, especially in the new technologies of solar and 5G."

Schlossberg said silver's lower cost relative to gold could make it an attractive investment in the retail space, too.

"If inflation becomes a serious story, silver has a much lower cost basis, has a much higher chance to go [higher on a] percentage basis than gold does. It really has a chance to become a meme story if everybody begins to kind of pivot towards the inflation idea," said Schlossberg.

Craig Johnson, chief market technician at Piper Sandler, is looking to a surge in oil prices and the knock-on effect in the energy space. He sees upside to $63 for the XLE energy ETF, which holds major oil stocks such as Chevron and Exxon. That ETF close below $56 on Friday.

"The second way is I'd play it through copper, and one of the best ways to play that is through Freeport-McMoRan. Very high correlation … to the 10-year break-even rates," he said. "It's in a very nice uptrend. We'd be buying this pullback in here, and we see upside back to the 2008 and 2011 highs which would still give you 50% upside from current levels."

Freeport-McMoRan has already rallied 57% this year. Copper prices have surged almost 30%.

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