by Peter Gorenstein
Gold is likely to make a new inflation-adjusted high before its current bull move ends. That’s the word from Frank Holmes the man behind the Morningstar 5-star rated U.S. Global Investors Gold and Precious Metals Fund, which is up 33% in the past year.

The journey to new highs will comes with bumps along the road. Holmes predicts several 10% price swings in the near future. But, he firmly believes negative interest rates combined with massive deficits is a recipe for gold to shine.

What’s his price target?

Holmes predicts gold can easily reach $2300 – the inflation-adjusted high it reached in the early 1980s.

Even-though he is a gold bull, Holmes says investors should only put 10% of their assets in gold; half in bullion and the other half in stocks.

And, he preaches caution when selecting gold stocks, recommending only buying those companies that “respect value per share.” Meaning, avoid the names that may need to raise capital through new stock offerings. Stocks that make his grade include RandGold, and two royalty companies, Royal Gold and Franco Nevada.

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