Frank Holmes: “Chindia” Buying Gold on Dips, 20% Corrections Are “Non Events”

Mike Gleason (Money Metals Exchange):

Frank, it's good to have you back on. Congratulations on another well-deserved award and thanks for joining us again today.

Frank Holmes (U.S. Global Investors):

Well, thank you for that recognition, but I want to make sure that your listeners know that portfolio manager Ralph Aldis is also key in that whole thought process and director of research and oversees the gold funds with myself. He's a geologist. He has a master’s in mineral economics, a master’s in geology. I like to tease him he has more degrees than a thermometer.

Mike Gleason:

Well, congratulations to you both, for sure. Well, on that note we'll start out here with the mining stocks because they've had a quite tumultuous year, Frank. Just looking at the GDX, one of the main mining stock indices here, it nearly tripled over the first 6 months of the year but then gave back about half of those gains. We may have found support recently at roughly 21 or 22 on the GDX. So do you think the downside move has exhausted itself in the miners and that we have seen the low here or is there more downside to come?

Frank Holmes:

I think that we have the worst behind us unless rates do have a big surge. But I’d like to point out that a couple weeks ago on our Frank Talk, an investor alert which we publish every Friday on our thoughts and observations of capital markets, and in particular on the gold. We published it October the 10th was gold historical 30-year pattern. And when you do get this massive surge in September and a fall in October, and it is just done like clockwork. It happens 80% of the time. Gold corrects from a big run in September. So, this is normal.