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Noted Gold Bull Weighs In On Barbarous Relic

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Gold is pushing closer to $1,300 per ounce as investors bet that the Federal Reserve will print money to combat economic weakness and the looming threat of deflation.

Recently, Frank Holmes, CEO and Chief Investment Officer of US Global Investors, did an interview with The Gold Report about where he sees the price of gold headed from here.

The interview covers a lot of topics, from trends in new emerging markets to the impact of government policies and regulations.

Money quotes:

“My thoughts are that in the next five years gold's going to double. That means it's going to grow at a 15% compounded rate of return, which is much greater than what's expected of bonds. The next five-year bond will grow at 2%. What's interesting is that gold's volatility for the past 10 years has been less than the S&P's volatility.”

What does that mean for gold stocks?

“What that means to gold stocks is much more significant because there's an approximate leverage of almost 3-to-1. So if gold doubles, you can turn around and get three times that in gold stocks—particularly those with characteristics that we have been able to do in our regressional studies that protect shareholder value with growth in production per share or reserves per share.”

POSITION:  No positions in stocks mentioned.