VIDEO - Frank Holmes: Very Bullish on Gold, Here’s What’s Holding it Back

This interview is part of the Investing News Network’s coverage of PDAC 2021. Click here for the full playlist.

It’s no secret that the gold price has been on the decline so far in 2021. But better times lie ahead, according to Frank Holmes of US Global Investors (NASDAQ:GROW). 

Speaking to the Investing News Network, he explained that gold is closely correlated to the US 10 year Treasury — specifically, when Treasury yields rise, the price of gold falls.

“We saw in … the beginning of September the 50 day moving average for 10 year yields started rising,” Holmes said, adding that when that happened the price of the yellow metal started falling off. “(That’s) because there’s always this parity trade between gold and the 10 year government bond yield.”

Holmes, who is CEO and chief investment officer at US Global Investors, said he’s “very bullish” on gold, and is also interested in metals connected to the green energy push, such as copper and silver.

Outside the commodities space, he touched on bitcoin, saying that the cryptocurrency’s volatility is a product of its novelty. “Whenever something is new and disruptive and innovative you get huge volatility as more and more people start to adopt to it and there’s naysayers,” he said.

In closing, Holmes gave a final tip: “The biggest thing I’d share … is whatever your age is, that age is the same as what you should (invest) in short-term income and growing dividend-paying stocks.”

Explaining what that means, he said that a 25 year old should have only 25 percent of their portfolio in those asset classes, while 75 percent should be in riskier growth stocks, including bitcoin and ethereum.

“Each year as you get older, you should just tail back and cut back and rebalance your portfolio,” Holmes continued. “I think that’s the biggest, wisest part. And in that whole thesis is 10 percent minimum … in gold-related assets. And you should rebalance once a year to maintain that 10 percent weighting.”

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.