ANCHOR (OFF-CAMERA) ENGLISH SAYING:

I'm sure you're very relieved when 2013 came to a close, not the best of years.

DAN DENBOW, USAA PRECIOUS METALS & MINERALS FUND MGR., (ENGLISH) SAYING:

No it's been difficult for precious metals for sure especially for the gold commodity. Registering its first down year in 13 years, which is difficult. Hopefully, we'll be able to move from the most unloved asset class to maybe the most loved for 2014.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

What are your expectations for this year in terms of gold? I mean, will people maybe start to think about interest rates rising and buying gold as a bit of inflation hedge?

DAN DENBOW, USAA PRECIOUS METALS & MINERALS FUND MGR., (ENGLISH) SAYING:

Yeah, I think, you know, we're still going to be locked into what's the Fed doing what, you know, how quickly do they raise rates, do they just stop buying or do rates rise faster? Yeah, as you know, negative real rates are always a benefit for gold and so if we lose that tailwind, it could be a concern for investors but longer term, investors have to remember that, you know, we do have to worry about inflation. We do have worry about the global currency debasement that's taking place. Central banks have printed a lot of money the last few years and eventually that should come in and look to what's the hard asset or the hard currency which is gold.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So what does it mean for your investments? About 85% of your fund is in gold stocks, do you make some shifts out of that? Are these stocks themselves undervalued at this point?

DAN DENBOW, USAA PRECIOUS METALS & MINERALS FUND MGR., (ENGLISH) SAYING:

I think they're undervalued. They've gone through a retrenchment definitely and 2013 was a difficult year for gold mining stocks. The reason we have mining stocks is they get operating leverage and they get some optionality. So when that gold price moves up, they should move two to three times what the gold price move is. So if gold's doing better or I think even as gold's flat for 2013, you're going to see better movements out of gold mining stocks just from the cost cutting to better rationalization they've done. We've had a lot of management changes. I think people are thinking more about it as a business and not just trying to find gold.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Do they lose on the downside in terms of that-

DAN DENBOW, USAA PRECIOUS METALS & MINERALS FUND MGR., (ENGLISH) SAYING:

Yeah, you know, leverage cuts both ways unfortunately and it did cut hard in 2013. We think we'll get the benefit of that going into 2014. And the stocks look fairly cheap if you just get gold to hold in here at these prices.