Frank Holmes: Macro Factors All Point to a Much Higher Gold Price
Frank says gold is definitely in an uptrend and discusses how the global PMI manufacturing index peaked last year. The PMI index has a pretty good correlation with economic activity, commodities, and energy. The trade war has exacerbated the decline in the PMI since China and America make up 40% of all global trade. Also, we see thirty percent of all government bonds around the world going negative. We are due for a recession and governments are merely trying to postpone the inevitable by “strangulation through regulation” especially in Europe. Bonds are now a high-risk investment, and all of this is bullish for gold.
He discusses Goldspot and their approach to quant research and investing. Quant research can de-risk exploration and allow companies to analyze a lot of data and even outperform the best people. This approach makes spending money on exploration better, more cost-effective, and safer for investors. Frank says, “Speculative money is not going into resources, and juniors need that spirit of speculation.”
Governments are now opening the money printing spigots since most investors aren’t interested in buying bonds. He is amazed there isn’t more money going into bullion. Governments are pressing a lot of panic buttons as they try and stop the recession. These actions are a perfect setup for gold, and it’s just a matter of time before we go back to 1900 gold and above.
Time Stamp References:
0:40 – Gold and trade wars.
2:40 – High risk bonds.
3:50 – A.I. and Quant systems.
5:30 – Derisking exploration.
7:00 – E.U. risks and speculation.
10:00 – What Goldspot looks for in juniors.
14:20 – Negative yielding bonds and recession.
17:30 – Outlook for copper.
Talking Points From This Week’s Episode
• PMI index is in decline, forecasts a recession.
• Quant research can de-risk stock selection.
• Governments are strangling companies through regulation.
• They are printing money since investors won’t buy bonds.
• Copper is down and could be an opportunity.
Frank Holmes is Independent Chairman of GoldSpot discoveries. He is also Chief Executive and Chief Investment Officer at U.S. Global Investors, a leading mutual fund and asset management firm. In 2015, Mr. Holmes led the company into the exchange-traded fund (ETF) business with the launch of the U.S. Global Jets ETF, which invests in the global airline sector.
In 2017, U.S. Global Investors made a strategic investment in HIVE Blockchain Technologies, listed in Toronto, and Mr. Holmes was appointed non-executive Chairman of the Board. Thought leader in both the technology and mining space and a pioneer in using a quant-approach to investing.
He is a sought after keynote speaker at international investment conferences and a regular guest in business media. His Frank Talk CEO Blog is one of the most widely read in finance.
Mr. Holmes is a native of Toronto and is a graduate of the University of Western Ontario with a bachelor’s degree in economics. He is a former president and Chairman of the Toronto Society of the Investment Dealers Association.