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Is it Over for Gold?

    October 29, 2009

Frank and Simon Wall Street 102909I visited the Wall Street Journal offices this morning to discuss gold and commodities markets with reporter Simon Constable. Simon and I discussed gold’s volatility and demand concerns. I also outlined who some of gold’s key constituents are:

There are what they call the price takers and the price makers. The price takers are the jewelers...they’re a huge part of the demand equation. The price makers are the investment people who are worried and have a lack of confidence in the government’s policies about the currency.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

The following securities mentioned in the interview were held by one or more of U.S. Global Investors family of funds as of September 30, 2009: SPDR Gold Trust. #09-758

 

A Gold Rally with Legs?

    October 06, 2009

BrianHicksTV100609News that oil-producing countries are in talks with oil-consuming countries to denominate future transactions in a basket of currencies rather than in dollars sent the U.S. dollar to new lows and gold to new non-inflation adjusted highs of $1,045 before settling around $1,039.

Portfolio manager Brian Hicks spoke with Stacey Delo from Marketwatch about what’s behind gold’s big move upward today and whether today’s move is just the beginning of a long-term trend for the precious metal.

Hicks believes the trend has legs and has even moved his price target higher.

My original target was $1,100 by year-end, and I think where the dollar is now and the potential for it to go lower between now and the year end, I think I have to move that target up a bit to $1,150, maybe $1,200 by year-end… We’ve tested $1,000 an ounce on several occasions over the last 18 months and now we’ve finally broken through. I think that it implies that we could see higher moves from here.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-704

 

What Drives Performance of Gold Stocks

    September 02, 2009

I appeared on CNBC’s “Street Signs” with Erin Burnett this afternoon to discuss the research we did on the September performance for gold. Burnett asked what particularly drives performance of certain gold stocks over others.

“What research has shown is that the leverage is in unhedged gold stocks. That’s where you get a bigger move. And historically a 1 percent move in the price of bullion translates into a 3 percent move for unhedged gold stocks. So that’s what we focus on and we like those companies that protect the shareholders’ value on a per share basis. And what we’ve seen is those companies that have the highest production-per-share growth and reserve-per-share growth end up having the best performance.”

The following securities mentioned in the interview were held by one or more of U.S. Global Investors family of funds as of 6/30/09:  Jaguar Mining, Randgold Resources, Royal Gold, Teck Resources Ltd. 09-594

 

Good Odds for a Commodities Rally This Fall

    August 19, 2009

I stopped by CNBC’s “Squawk on the Street” yesterday to talk commodities and emerging markets with hosts Erin Burnett and Mark Haines. Erin asked me where I stood on the inflation vs. deflation debate and I reiterated my longstanding position.

For eight years my thesis for gold has been gold will rise on deflation. Whenever you have extreme deflation or big inflation, gold rises. If there’s none like in ’97, ’98 and ’99 then gold is basically dormant as a monetary asset. We have deflation. Why do I say that? Because we have negative interest rates. Since 2001, 80 percent of the time we have had negative interest rates, that’s a deflationary cycle. Now we have deficit spending, so any country that has negative interest rates coupled with deficit spending, gold goes up in that currency.

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A Skewed Supply-Demand Situation

    August 14, 2009

Evan Smith, co-manager of the Global Resources Fund (PSPFX), appeared on Bloomberg News today to discuss his outlook for natural gas with host Mark Crumpton. Evan explained what concerns are giving him pause.

The commercial and industrial component of natural gas demand is still trending down roughly 12 percent year-on-year. That’s at a time when we’ve had a pretty big response over the past year in reducing natural gas production. That being said we’re 23 percent above where we were a year ago for storage levels. A lot of gas is in storage but we’re coming up on the end of the storage season. I think very near term we’re going to see some volatility, maybe lower gas prices but if you look past the next several weeks or maybe even month or so, I’m actually quite constructive on natural gas once we get beyond this weak period and things start to improve into the fall and into 2010.

Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. 09-563

 

 

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