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Buy Gold While Supplies Last, Says Fund Manager



March 10, 2010 – Comments (2)

Definitely watch the accompanying interview with Frank Holmes. Continue watching all the way to the end where Holmes discuses Gold behavior in relation to negative real interest rates.


Buy Gold While Supplies Last, Says Fund Manager
Posted Mar 09, 2010 09:35am EST by Peter Gorenstein



Frank Holmes, CEO and CIO of U.S. Global Investors, a long time gold bull sees no reason for this trend to end.

He tells Aaron in the accompanying clip, "there are many compelling factors both from a supply side and then from the demand side that looks like gold will trade higher."

Holmes' reasons to bullish on gold:

-- Massive federal deficits and low interest rates in the United States and elsewhere will raise inflation risks and keep downward pressure on currencies.

-- Rising incomes in Asia, where affinity for gold runs deep, will have a sizable positive impact on demand; Holmes tells Aaron that China is now the largest producer of gold in the world but that won't drive down prices because the government is "using it as a reserve currency for themselves." However, bulls should note China's chief for exchange official said this morning they would limit their purchases.

-- Peak Gold? Gold production from mines is not adequate to meet demand. Production is dropping around the world. Holmes notes worldwide production ell 10% in 2008 and is especially dramatic in South Africa - the world's largest producer.

Holmes, however, does have a few words of caution for those looking to get rich on gold. He only recommends a 10% allocation in gold that would be divided evenly between bullion and stocks. Among his favorite gold stocks is Randgold Resources Limited, a stock he owns and has recommended here in the past for its strong management.


2 Comments – Post Your Own

#1) On March 10, 2010 at 8:34 PM, Tastylunch (29.33) wrote:

Bull comment of the day


"I've been using this site since around March of last year. dwot, you have dogmatically said the same thing since then. 'This rally is phoney-baloney.'  You and all the other "top fool" doomsayers...

You missed out out on the greatest rally of our lifetime and continue to do so. I agree, I think rentals are a better focus for you."

LOL I love it!

Some day people are going to have to explain to me why permaBulls are always so hostile to bears.

probably because no one likes a killjoy. even when they are right


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#2) On March 10, 2010 at 8:53 PM, binve (< 20) wrote:


"I have been around the block you know! I've been here a whole year man! There's no bear market jive talkin turkey! When you have a year's experience in a near vertical market with no pullbacks, it really toughens a man, and you understand what investing is all about." .... LOL!!!!

You just made my day Tasty, thanks :).

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