Frank Holmes: Gold Doesn’t Need a Crisis to Reach US$8,000

The gold price tends to rise in times of crisis, but according to Frank Holmes, CEO and chief investment officer at US Global Investors (NASDAQ:GROW), the yellow metal has the potential to go much higher even without a major calamity.

Speaking at the Denver Gold Forum, Holmes explained that worldwide money printing triggered by attempts to stimulate economic activity could lead to a substantial gold price increase.

“Gold can take off without (a) world-coming-to-an-end scenario — and so can your art if you’re an art collector. Your prints from Andy Warhol — they’re going to go up dramatically,” he said.

“Rolex watches, you’re seeing all of a sudden those watches are going up that they’re not making any longer — they’re going up at a very rapid rate in value because there’s so much money printing.”

While Holmes pointed out that gold would not reach US$10,000 per ounce without something catastrophic happening, a gradual rise to a significantly higher price is not unlikely.

“If gold was US$250 in 2001 and gold ran to US$1,900 — well, you’ve got an eight times increase. Gold then fell to US$1,000 and laid there for over five years. So if it went up another eight times that’s US$8,000. Well, that doesn’t mean the world’s coming to an end.”

Holmes emphasized that it’s a good idea for investors to allocate 6 to 10 percent of their portfolio to gold, and said that while the yellow metal has enjoyed a healthy run this year there’s still time to get in.

“We’re far from US$1,900. And what happens when the 30 year US government bond goes to negative rates? Do you know what’s going to happen? Gold’s (going) to US$3,000, US$4,000,” he said.

“So if Germany is negative rates, France is negative rates, Switzerland is negative rates … everyone is negative rates and Japan is negative rates. Just think about what’s going on.”

Watch the interview above for more from Holmes on gold, including his comments about the US Global GO GOLD and Precious Metal Miners ETF (ARCA:GOAU). Our full playlist for the Denver Gold Forum can be found on YouTube.

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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.