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U.S. Global Investors
Searching for Opportunities, Managing Risk
What’s Driving Gold?
Frank Holmes,
CEO and Chief Investment Officer
www.usfunds.com
1.800.US.FUNDS
July 2009
09-471
Fund Recognition
Investment
leadership results
in performance
Winner of 26 Lipper Fund Awards and certificates since 2000
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Government Policy Model —
Precursor for Change
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E7 Countries
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G7 Countries
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Holding T-bills Or Cash No Longer Generates Much
Interest and, Unlike Gold, Still Bears Credit, Inflation,
FX and Political Risk
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U.S. M2 Money Supply
Biggest Economy in the World
Source: U.S. Global Research
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China M2 Money Supply
Most Populated Country In The World
Source: U.S. Global Research
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High Correlation of Oil and Money Supply
Government will continue to print
money, like the recent bailout of
Fannie Mae and Freddie Mac, to
support the economy
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Narrow Money Supply Growth EXPLOSION
Source: Weldononline.com
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Swiss Money Supply EXPLOSION
Source: Weldononline.com
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Even Japanese Money
Supply Growth is Accelerating
Source: Weldononline.com
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Bank of England has Cut Rates to RECORD LOW, Shifting
the Focus Towards Quantitative Easing. Bank of Canada
Cut Rates to 0.50%, and Discusses Quantitative Easing
Source: Weldononline.com
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Central Bank of China Cuts
Rates to RECORD LOW
Source: Weldononline.com
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Swiss Short Rates Back
to Historic Lows at 0.50%
Source: Weldononline.com
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Price Deflation Intensifying
Beyond ‘Historic’ Levels
Source: Weldononline.com
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Gold ‘Priced-in’ Rupee Flirting
with 50,000 Rupee Per Ounce
Source: Weldononline.com
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Governments Panic to Reignite the Economy
“Consumer Cocoon”… as Consumption Collapses
Source: Weldononline.com
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China — Massive Infrastructure
Initiatives Take Hold
Source: Weldononline.com
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China — Money Supply Accelerates
Since November 2008
Source: Weldononline.com
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China — Money Supply Grows to New Levels
Source: Weldononline.com
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Technical Spotlight: Gold
Source: Weldononline.com
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Technical Spotlight: Gold
Source: Weldononline.com
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Technical Spotlight: Silver
Source: Weldononline.com
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Special Focus: U.S. Dollar
Source: Weldononline.com
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Special Focus: U.S. Dollar
Source: Weldononline.com
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Is Gold ‘Signaling’ That Commodities Provide
‘Value’ … or … Is Gold ‘Overvalued’ ???
What’s Driving
Gold Webcast
03/05/09
Source: Weldononline.com
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In Gold They ‘Trust’ … Versus ALL Paper
Source: Weldononline.com
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Gold seasonality
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Volatility Rolling 60 Days
Gold 60-Day % Change (March 21, 1994 through March 19, 2009)
Raise cash
Invest cash
Raise cash
Invest cash
Sources: Bloomberg, U.S. Global Research
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Oscillator Rolling 60 Days
Gold vs. Dollar 60-day % Change Oscillator (March 19, 1999 through March 19, 2009)
Sources: Bloomberg, U.S. Global Research
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Gold/S&P 500 ratio
Gold appears undervalued
to the S&P 500.
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Right Time for Gold Mining Stocks?
What’s Driving
Gold Webcast
03/05/09
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Right Time for Gold Mining Stocks?
Investor Alert
Special Report
06/05/09
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Value Drivers for Superior Performance
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Higher Interest Rates
Would Pose Risk to Gold
Source: Weldononline.com
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What’s Driving Gold?
The critical drivers for gold are
pointing in the same direction.
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Come visit us at…
Facebook: Search for U.S. Global Investors
Twitter: www.twitter.com/usfunds
Frank Talk: www.usfunds.com/franktalk
Investor Alert: www.usfunds.com/alert
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Disclosures
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Toronto
Stock Exchange Gold and Precious Minerals Index is a capitalization-weighted index designed to measure the performance of the gold and
precious minerals sector of the TSX 300 Index. The U.S. Trade Weighted Dollar Index provides a general indication of the international value
of the U.S. dollar. The Reuters/Jefferies CRB Index is an unweighted geometric average of commodity price levels relative to the base year average
price. The Goldman Sachs Commodity Index is a composite index of commodity sector returns, representing an unleveraged, long-only investment
in commodity futures that is broadly diversified across the spectrum of commodities.
None of U.S. Global Investors clients held any of the securities mentioned as of 3/31/09.
Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard
deviation is also known as historical volatility.
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