Two Gold Trends to Watch

Author: USGI
Date Posted: August 14, 2013 Read time: 2 min

In an interview with Kitco’s Daniela Cambone on August 8, Frank Holmes talks about the trends affecting gold. The first trend is gold’s seasonal cycle over the past 35 years. Frank explains that gold has historically bottomed in July, with a run starting in August, climbing from there through the month of September and correcting in October. Frank says gold has peaked in February during Chinese New Year.

In addition, the U.S. dollar has had a great run, but for gold investors, the magic number is a positive 2 percent for interest rates. When government treasury bonds pay 2 percent over inflation for a sustained period of time, gold tends to become unattractive as a monetary asset.

Watch Frank’s interview at Kitco now to hear their conversation on gold, along with his comments on several other commodities like silver, platinum and copper.

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The interview references the investment theory of an investment as insurance against a separate market event that could negatively affect performance of an investment. The reference does not guarantee performance or a safeguard from loss of principal by investing in that asset.

The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals.  The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

The following securities mentioned were held by one or more of U.S. Global Investors Funds as of 06/30/13: Michael Kors