Frank Holmes On Finding A Place For Gold In Your Portfolio

CEO and Chief Investment Officer of U.S. Global Investors (NASDAQ: GROW) Frank Holmes provided his strategies for gold, saying that demand for the commodity is especially high in India and other places globally, on CNBC's Squawk Box Tuesday morning.

"I've always advocated a five percent in jewelry and bullion, and a 5 percent in gold stocks. So that's a key part in a diversified portfolio, rebalancing that," said Holmes.

There's been a lot of movement around the price of gold during the United States government shutdown, and globally, demand also fluctuates.

"Now, what happens each year in October is gold takes a correction move just like in oil."

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Holmes called it a "35-year seasonal pattern" that both commodities go through.

"A shoulder month correction, and then we'll get in for gold, going forward will be the season of lights in India, which will be important, and I think the last thing…that's really important for investors is that this bizarre high-frequency trading that's taking place in the commodities," said Holmes.

"Frank Tang at Reuters commented on this, and shows a very detailed chart of this pattern of flashing 43,000 contracts, which is a multi-billion dollar trade, and then canceling, and 3,000 creating a cascading of commodity prices down. But the physical demand in india and places like that is still robust and healthy."

Jason Cunningham had no position with the mentioned entities while writing this article. Visit Jason on Twitter at @JasonCunningham and @Benzinga.