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October 2015

For the month ending October, spot gold closed at $1,142.16, up $27.09 per ounce, or 2.43 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 9.21 percent. The U.S. Trade-Weighted Dollar Index gained 0.62 percent for the month. For the month ending October, the Philadelphia Gold & Silver Index (XAU) rose 11.25 percent.  The S&P/TSX Global Gold Index gained 7.92 percent. The FTSE/JSE African Gold Mining Index lifted 11.53 percent. See complete fund performance here.


  • Palladium was the best performing precious metal, rising 3.68 percent for the month. Volkswagen’s emissions scandal opens up the possibility that buyers might turn towards gasoline cars, which use more palladium.
  • Gold got a boost last month as China announced further interest rate cuts and the European Central Bank (ECB) reemphasized its pledge to use all the monetary tools at its disposal to support global growth. Further, Russia boosted its gold purchases by the largest amount in a year throughout the month of September, adding 34 tonnes. Gold traders maintained their bullish calls on the precious metal for three straight weeks. Of the 24 traders surveyed by Bloomberg, 13 hold a bullish outlook on gold.
  • Gold consumption in mainland China might match or exceed the record in 2013 after financial market turmoil and the yuan’s devaluation boosted the metal’s appeal. Further, China’s net imports of gold from Hong Kong increased for the third month in September as lower prices and inventory building before a week-long holiday spurred buying. Net purchases rose to 96.6 tonnes from 54.7 tonnes in August and 61.7 tonnes a year earlier. Meanwhile, India regained the top spot from China as the biggest overall consumer of gold in the first nine months of this year with a total consumption of 642 tonnes. China is trailing by just 63 tonnes.


  • India officially announced the implementation of its gold monetization scheme that is set to replace existing deposit structure. The plan seeks to reduce imports as banks will now be allowed to sell or lend gold to retailers, thus boosting supply if owners of the gold trust the system enough to lend their gold to the state.
  • Disappointing earnings releases from Alamos Gold, New Gold and Goldcorp sent the stocks on a downward spiral last month that saw prices collapse by more than 15 percent in a week. Goldcorp reported third-quarter profit that missed analysts’ estimates. The company’s net loss was $192 million, or 23 cents per share, wider than the loss of $44 million, or 5 cents per share, a year earlier.
  • In October, investors had been piling into gold for more than a month, anticipating that the Federal Reserve would be forced to keep U.S. interest rates near a record low for longer. However, officials announced that they expect moderate growth for the economy and left open the option to raise rates in December. As a consequence, prices dropped immediately after the policy statement, retreating from the biggest gain in more than two weeks.


  • Investors are eyeing gold once again as $393 million flowed into U.S. precious metals-backed exchange traded funds (ETFs) through October 20. After a multiyear downturn in the precious metal, more bulls are emerging. Retail investors have depleted coin dealer inventories of silver coins, Russia and China are buying gold, and even Paul Singer of Elliot Management said recently that investors should have up to 10 percent of their portfolio in gold and/or gold stocks.  Singer also said the supply of gold cannot be radically expanded in a short period of time, which paints a good supply/demand imbalance. Furthermore, bullion looks extended as it has posted five consecutive quarterly losses, the longest run of declines since 1997.
  • The October uptrend in gold could mean a positive 2015 return by year end. According to Capital Economics, the headwinds for gold could be behind us, pointing to tighter labor markets and perhaps even inflation. The report notes that inflation should snap back in most economies over the next few months as the big falls in oil prices in late 2014 drop out of the annual comparison. The group’s 2016 year-end forecast is $1,400 per ounce.
  • Klondex provided an update on its Midas exploration drill program, noting an intersection of 115 feet with an average grade of 2.3 grams per tonne. This drilling has revealed a very different style of mineralization from the Midas bonanza veins that have been mined to date. The new area is highly oxidized, and while the grade is lower than at other drill locations, the breadth of the intersection creates the potential for substantial quantity.


  • Gold imports by India dropped 52 percent in September after shipments had surged in August, when jewelers stocked up to meet a surge in demand during the festival and wedding season that started in October. The lack of investment demand is a cause for concern given the negative sentiment toward the asset class.
  • Goldman Sachs is expecting the Fed to hike rates in December and sees gold suffering as a result. The bank sees gold falling to $1,000 over the next 12 months. Meanwhile, French investment bank Natixis sees gold prices averaging $990 per ounce in 2016 on expectations of higher U.S. interest rates and strength in the U.S. dollar. And according to GFMS, the research unit of Thomson Reuters, gold is set to remain under pressure until there is more clarity on the timing and the scale of U.S. rates normalization.
  • Venezuelan central bank gold holdings declined by 19 percent between January and May of this year, according to its financial statements, likely reflecting gold swap operations and lower bullion prices. This underscores the efforts the government is taking to raise the cash to repay creditors and fund imports amid a punishing recession, inflation exceeding 100 percent and a collapse in the price of oil, its main export. Facing $3.5 billion worth of bond payments, the country’s international reserves are hovering near a 12-year low.


Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. For a portion of periods, the fund had expense limitations, without which returns would have been lower. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund's prospectus (e.g., short-term trading fees of 0.05%) which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end here or by calling 1-800-US-FUNDS.

The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The index benchmark value was 500.0 at the close of trading on December 20, 2002. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Philadelphia Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The S&P/TSX Global Gold Index is an international benchmark tracking the world's leading gold companies with the intent to provide an investable representative index of publicly-traded international gold companies. The FTSE/JSE African Gold Mining Index is a market capitalization weighted index.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Gold and Precious Metals Fund and the World Precious Minerals Fund as a percentage of net assets as of 9/30/2015: Volkswagen Group 0.00%; Alamos Gold Inc. 0.01% in World Precious Minerals Fund; New Gold Inc. 0.08% in World Precious Minerals Fund; Goldcorp Inc. 0.00%; Klondex Mines Inc. 16.91% in Gold and Precious Metals Fund, 17.76% in World Precious Minerals Fund.

Net Asset Value
as of 11/24/2015

Global Resources Fund PSPFX $4.94 0.05 Gold and Precious Metals Fund USERX $4.76 0.05 World Precious Minerals Fund UNWPX $3.90 0.07 China Region Fund USCOX $7.77 0.01 Emerging Europe Fund EUROX $5.60 -0.11 All American Equity Fund GBTFX $27.22 0.06 Holmes Macro Trends Fund MEGAX $20.68 -0.03 Near-Term Tax Free Fund NEARX $2.25 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change