UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-1700
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FRANKLIN GOLD AND PRECIOUS METALS FUND
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(Exact name of registrant as specified in charter)

ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)

Registrant's telephone number, including area code: (650) 312-2000
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Date of fiscal year end: 7/31
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Date of reporting period: 1/31/04
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ITEM 1. REPORTS TO STOCKHOLDERS.

January 31, 2004
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[PHOTO OMITTED]

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SEMIANNUAL REPORT AND SHAREHOLDER LETTER SECTOR
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WANT TO RECEIVE
THIS DOCUMENT
FASTER VIA EMAIL?
FRANKLIN GOLD AND
PRECIOUS METALS FUND Eligible shareholders can
sign up for eDelivery at
franklintempleton.com.
See inside for details.

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[LOGO OMITTED](R)
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS

FRANKLIN o Templeton o Mutual Series

FRANKLIN TEMPLETON INVESTMENTS

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager
structure combines the specialized expertise of
three world-class investment management groups--
Franklin, Templeton and Mutual Series.

SPECIALIZED EXPERTISE Each of our portfolio management groups operates
autonomously, relying on its own research and
staying true to the unique investment disciplines
that underlie its success.

FRANKLIN. Founded in 1947, Franklin is a leader in
tax-free investing and a driving force in fixed
income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity
investing.

TEMPLETON. Founded in 1940, Templeton pioneered
international investing and, in 1954, launched
what has become the industry's oldest global fund.
Today, with research offices in over 25 countries,
they offer investors the broadest global reach in
the industry.

MUTUAL SERIES. Established in 1949, Mutual Series
is dedicated to a unique style of value investing,
searching aggressively for opportunity among
undervalued stocks, arbitrage situations and
distressed companies.

TRUE DIVERSIFICATION Because our management groups work independently
and adhere to distinctly different investment
approaches, Franklin, Templeton and Mutual Series
funds typically have a low overlap of securities.
That's why our funds can be used to build truly
diversified portfolios covering every major asset
class.

RELIABILITY YOU At Franklin Templeton Investments, we seek to
CAN TRUST consistently provide investors with exceptional
risk-adjusted returns over the long term, as well
as the reliable account services that have helped
us become one of the most trusted names in
financial services.

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MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
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[PHOTO OMITTED]

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Not part of the semiannual report

CONTENTS

SHAREHOLDER LETTER ....... 1 SEMIANNUAL REPORT Financial Statements .................... 17

Franklin Gold and Precious Metals Fund ... 3 Notes to Financial Statements ........... 21

Performance Summary ...................... 8 Tax Designation ......................... 27

Financial Highlights and Proxy Voting Policies and Procedures .... 30
Statement of Investments ................ 11

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SEMIANNUAL REPORT

FRANKLIN GOLD AND PRECIOUS METALS FUND

YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: Franklin Gold and Precious

Metals Fund seeks capital appreciation, with current income as a

secondary goal, by investing at least 80% of its net assets in

securities of companies that mine, process or deal in gold or other

precious metals.

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

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GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets as of 1/31/04

Canada ...................................... 35.2%
South Africa ................................ 22.5%
U.S. ........................................ 14.5%
Australia .................................... 8.1%
Ghana ........................................ 5.7%
Peru ......................................... 4.4%
U.K. ......................................... 3.5%
Papua New Guinea ............................. 1.6%
Short-Term Investments and
Other Net Assets ............................. 4.5%

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We are pleased to bring you Franklin Gold and Precious Metals Fund's semiannual
report for the period ended January 31, 2004.

PERFORMANCE OVERVIEW

Franklin Gold and Precious Metals Fund - Class A delivered a +28.39% cumulative
total return for the six months ended January 31, 2004, as shown in the
Performance Summary beginning on page 8. By comparison, the broad Standard &
Poor's 500 Composite Index (S&P 500) had a 15.22% total return, and the
sector-specific Financial Times (FT) Gold Mines Index posted an 18.87% price
return during the same period. 1

1. Sources: Standard & Poor's Micropal; Financial Times. The unmanaged S&P 500
consists of 500 stocks chosen for market size, liquidity and industry group
representation. Each stock's weight in the index is proportionate to its market
value. The S&P 500 includes reinvested dividends and is one of the most widely
used benchmarks of U.S. equity performance. The unmanaged FT Gold Mines Index is
an unweighted index that tracks the daily performance of gold mining companies
in South Africa, Australia and North America. This is a price-only index and
does not include dividends. One cannot invest directly in an index, nor is an
index representative of the Fund's portfolio.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND COMPLETE LEGAL
TITLES OF ALL PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF
INVESTMENTS (SOI). THE SOI BEGINS ON PAGE 15.

Semiannual Report | 3

[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:

PORTFOLIO BREAKDOWN
Based on Total Net Assets as of 1/31/04

Long Life Gold Mines 59.0%

Medium Life Gold Mines 13.2%

Platinum & Palladium 10.6%

Gold & Diversified Resources 8.5%

Gold Exploration 2.9%

Foreign Equity Mutual Fund 1.3%

Short-Term Investments & Other Net Assets 4.5%

ECONOMIC AND MARKET OVERVIEW

During the six months ended January 31, 2004, domestic economic recovery
appeared to be on track. The annualized gross domestic product growth rate
surged 8.2% in the third quarter of 2003 and rose 4.1% in the fourth quarter.
The U.S. dollar's continued weakness, particularly against the euro, led to
modest trade balance improvements. Business sentiment climbed in January 2004 to
its highest level in nearly a decade; and business equipment spending,
especially in information technology, rose in the third and fourth quarters of
2003. Consumer sentiment rose in January to its highest level since November
2000. Consumer spending, however, grew only modestly in fourth quarter 2003
compared with strong third-quarter spending, which was fueled by federal tax
cuts, mortgage refinancing and auto-buying incentives. Slow wage growth, heavy
indebtedness and lower wealth since 2000 despite recent stock market gains
constrained consumer spending.

Lack of job growth remained a risk to the economy during the reporting period,
and although the unemployment rate fell to 5.6% in January, this occurred mainly
because of a labor force decline. At the Federal Reserve Board's (Fed's) January
meeting, Fed policymakers indicated they would not raise interest rates until
the job market improved meaningfully. Thus, they kept the federal funds target
rate at 1.00%, and maintained a neutral stance with respect to future economic
growth and inflation. However, the Fed said it "can be patient" about raising
rates, which was different from previous statements. The change in wording
caused mixed reaction among market analysts about when the Fed might begin
raising rates.

During the period, equity markets continued a rally that began in March 2003.
Data showing robust economic growth and improved revenue reports from corporate
America seemed to increase investor confidence in the stock markets. The S&P 500
rose 15.22% for the six months under review, while the technology-heavy Nasdaq
Composite Index increased 19.43%. 2

In the precious metals sector, gold prices continued to strengthen during the
six months under review, rising 13.5% from the beginning of the period. Gold
reached a high of $426 per ounce in January, a level not seen since 1988, before
closing the period just above $400 per ounce. The average gold price for the
period was $389 per ounce, up 11.5% from the prior six-month average of $349 per
ounce. Gold price strength can be attributed partially to U.S. dollar weakness.
The U.S. dollar depreciated 10% versus the euro and 12% versus the yen during

2. Source: Standard & Poor's Micropal. See footnote 1 for a description of the
S&P 500. The Nasdaq Composite Index measures all domestic and international
common stocks listed on The Nasdaq Stock Market. The index is market
value-weighted and includes over 3,000 companies.

4 | Semiannual Report

the period. Investor interest in gold and gold equities continued to be robust
throughout the period with record levels of long trades on the commodities
exchange as well as buoyant prices among many gold equities.

Platinum prices also remained quite strong during the six-month period, breaking
through the $850 level and reaching a 23-year high. Similar to gold, platinum
benefited from the weak U.S. dollar and strong global demand. Additionally,
delays at a number of large expansion projects managed by the world's leading
primary provider of platinum, Anglo American Platinum, helped boost prices.
Palladium, which has declined in price for the past three years, regained some
ground, rising from the $180 level to more than $200 at period-end as higher
platinum prices triggered some substitution of platinum with palladium.

Franklin Gold and Precious Metals Fund
Semiannual Report
January 31, 2004

APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) OF REGULATION S-T)

GRAPHIC MATERIAL (1)

The following chart represents Precious Metals prices for platinum, palladium
and gold in U.S. dollars per troy ounce, between 8/1/03 and 1/31/04. 3

Gold Platinum Palladium
8/1/03 $346.15 $679.50 $183.50
8/8/03 $356.75 $679.50 $177.50
8/15/03 $363.75 $699.50 $176.50
8/22/03 $362.95 $698.50 $193.50
8/29/03 $375.55 $710.00 $201.50
9/5/03 $377.35 $713.50 $218.50
9/12/03 $375.25 $698.00 $213.50
9/19/03 $381.85 $699.50 $218.50
9/26/03 $380.85 $705.50 $211.50
10/3/03 $369.55 $716.00 $209.50
10/10/03 $373.05 $730.50 $208.50
10/17/03 $371.65 $726.50 $195.50
10/24/03 $388.55 $737.50 $195.50
10/31/03 $384.25 $748.50 $208.50
11/7/03 $383.05 $755.50 $203.50
11/14/03 $397.55 $771.00 $199.50
11/21/03 $396.05 $764.50 $194.50
11/28/03 $398.15 $765.50 $189.50
12/5/03 $406.35 $788.00 $197.50
12/12/03 $408.85 $823.00 $208.50
12/19/03 $409.35 $829.50 $194.50
12/26/03 $412.25 $823.50 $202.50
1/2/04 $415.85 $814.50 $194.50
1/9/04 $426.38 $852.00 $203.50
1/16/04 $406.75 $855.50 $215.50
1/23/04 $408.08 $864.50 $235.50
1/30/04 $402.45 $837.50 $229.50

For illustrative purposes only; not representative of the Fund's portfolio
composition or performance.

TOP 10 HOLDINGS
1/31/04

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COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS

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Barrick Gold Corp. 7.9%
LONG LIFE GOLD MINES, CANADA
- ---------------------------------------------------------
Newmont Mining Corp. 7.1%
LONG LIFE GOLD MINES, U.S.
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Placer Dome Inc. 6.4%
LONG LIFE GOLD MINES, CANADA
- ---------------------------------------------------------
Harmony Gold Mining Co. Ltd.,
ord. & ADR 5.9%
LONG LIFE GOLD MINES, SOUTH AFRICA
- ---------------------------------------------------------
Ashanti Goldfields Co. Ltd., GDR, Reg S 5.7%
LONG LIFE GOLD MINES, GHANA
- ---------------------------------------------------------
Impala Platinum Holdings Ltd.,
ord. & ADR 5.2%
PLATINUM & PALLADIUM, SOUTH AFRICA
- ---------------------------------------------------------
Newcrest Mining Ltd. 5.0%
MEDIUM LIFE GOLD MINES, AUSTRALIA
- ---------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc., B 4.7%
GOLD AND DIVERSIFIED RESOURCES, U.S.
- ---------------------------------------------------------
Meridian Gold Inc. 4.5%
LONG LIFE GOLD MINES, CANADA
- ---------------------------------------------------------
Anglo American Platinum Corp. Ltd., ADR 4.4%
PLATINUM & PALLADIUM, SOUTH AFRICA
- ---------------------------------------------------------

INVESTMENT STRATEGY

Our conservative management style seeks to expose shareholders to the benefits
of diversification by investing globally in the precious metals sector. We like
companies with multiple mines, attractive production profiles, strong reserve
bases and active exploration programs that can drive future reserve and
production growth. While the sector can be volatile especially over the short
term, precious metals, such as gold, can be attractive because they are a hard
asset not tied to any particular country or financial system, which can help
stabilize a portfolio in times of economic uncertainty.

3. Amounts shown are based on spot prices quoted in U.S. dollars per troy ounce.

Semiannual Report | 5

MANAGER'S DISCUSSION

Given higher gold and platinum prices, all but one of the Fund's holdings posted
positive performance during the six months under review. The end of 2003 also
marked the fifth consecutive year that Franklin Gold and Precious Metals Fund
has outperformed the S&P 500. 4

The Fund's top performing stocks for the period, with individual weightings over
1.5% of total net assets, were Wheaton River Minerals, Ashanti Goldfields,
Companhia de Minas Buenaventura, Anglo American Platinum and Freeport-McMoRan
Copper & Gold. All of these were overweighted positions relative to the FT Gold
Mines Index. Wheaton River and Freeport benefited from higher copper prices as
both companies are significant miners of copper as well as gold. Competitive
acquisition attempts between AngloGold and Randgold Resources boosted Ashanti's
performance. AngloGold eventually gained board approval to proceed with the
acquisition.

The bottom performing stocks, each with positions greater than 1.5% of total net
assets, were Meridian Gold, Gold Fields, Kinross Gold and Randgold Resources. We
were overweighted in Meridian and Randgold relative to the FT Gold Mines Index.
Meridian shares continued to lag due to concerns over the company's inability to
gain approval to proceed with developing its Esquel project in Argentina.
Despite these concerns, and consistent with our strategy, we added to this
position during the period. Gold Fields suffered from operational problems as
well as cost pressure from an appreciating South African rand. Randgold's shares
fell following their failed takeover attempt of Ashanti Goldfields.

As gold prices rose, we increased our holdings in small-capitalization gold
companies as higher margins may help offset some of the risk of smaller, less
diversified operations. Because these smaller companies can be relatively risky
investments by themselves, we took a basket approach and bought small positions
in a number of different companies, significantly increasing the number of Fund
holdings. We also participated in six secondary stock offerings that included
warrants. Still, we maintained large weightings in the sector's largest and
broadly diversified players. Our two biggest holdings at period-end were Barrick
Gold and Newmont Mining, the sector's largest companies.

4. Franklin Gold and Precious Metals Fund - Class A one-year returns (not
including sales charges) were 25.39%, -7.38%, 10.00%, 37.38% and 52.32% for
1999, 2000, 2001, 2002 and 2003, respectively, compared with the S&P 500's
21.04%, -9.10%, -11.88%, -22.09% and 28.67% one-year returns for the same
respective years. The index is unmanaged and includes reinvested dividends. One
cannot invest directly in an index, nor is an index representative of the Fund's
portfolio. Past performance does not guarantee future results.

6 | Semiannual Report

Thank you for your continued participation in Franklin Gold and Precious Metals
Fund. We look forward to serving your future investment needs.

[PHOTO OMITTED] /S/Stephen M. Land

Stephen M. Land
Portfolio Manager
Franklin Gold and Precious Metals Fund

THIS DISCUSSION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF
JANUARY 31, 2004, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR MAIN
INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE DEPENDING
ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY NOT BE
RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY. THE
INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY,
INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED
RELIABLE, BUT THE ADVISOR MAKES NO REPRESENTATION OR WARRANTY AS TO THEIR
COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR INVESTMENT MANAGEMENT
PHILOSOPHY.

Semiannual Report | 7

PERFORMANCE SUMMARY AS OF 1/31/04

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses of each
class. Capital gain distributions are net profits realized from the sale of
portfolio securities. The performance table does not reflect any taxes due on
Fund dividends, capital gain distributions, if any, or any realized gains on the
sale of Fund shares. Total return reflects the Fund's dividend income, capital
gain distributions, if any, and any unrealized gains or losses.

PRICE AND DISTRIBUTION INFORMATION

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CLASS A CHANGE 1/31/04 7/31/03
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Net Asset Value (NAV) +$3.81 $17.54 $13.73
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DISTRIBUTIONS (8/1/03-1/31/04)
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Dividend Income $0.1001
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CLASS B CHANGE 1/31/04 7/31/03
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Net Asset Value (NAV) +$3.71 $17.16 $13.45
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DISTRIBUTIONS (8/1/03-1/31/04)
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Dividend Income $0.0457
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CLASS C CHANGE 1/31/04 7/31/03
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Net Asset Value (NAV) +$3.74 $17.32 $13.58
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DISTRIBUTIONS (8/1/03-1/31/04)
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Dividend Income $0.0403
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ADVISOR CLASS CHANGE 1/31/04 7/31/03
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Net Asset Value (NAV) +$3.90 $17.98 $14.08
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DISTRIBUTIONS (8/1/03-1/31/04)
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Dividend Income $0.1268
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8 | Past performance does not guarantee future results. | Semiannual Report

Performance Summary (CONTINUED)

PERFORMANCE

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CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ----------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +28.39% +35.91% +141.95% +38.74%
Average Annual Total Return 2 +20.99% +28.11% +17.92% +2.72%
Value of $10,000 Investment 3 $12,099 $12,811 $22,803 $13,079
Avg. Ann. Total Return (12/31/03) 4 +43.59% +20.30% +3.59%
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CLASS B 6-MONTH 1-YEAR 5-YEAR INCEPTION (1/1/99)
- ----------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +27.88% +34.90% +133.35% +132.44%
Average Annual Total Return 2 +23.88% +30.90% +18.26% +17.94%
Value of $10,000 Investment 3 $12,388 $13,090 $23,135 $23,144
Avg. Ann. Total Return (12/31/03) 4 +47.19% +20.65% +20.65%
- ----------------------------------------------------------------------------------------------------------
CLASS C 6-MONTH 1-YEAR 5-YEAR INCEPTION (5/1/95)
- ----------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +27.80% +34.85% +133.68% +34.17%
Average Annual Total Return 2 +26.80% +33.85% +18.50% +3.41%
Value of $10,000 Investment 3 $12,680 $13,385 $23,368 $13,417
Avg. Ann. Total Return (12/31/03) 4 +48.62% +20.62% +4.56%
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ADVISOR CLASS 5 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ----------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +28.49% +36.23% +145.34% +46.07%
Average Annual Total Return 2 +28.49% +36.23% +19.66% +3.86%
Value of $10,000 Investment 3 $12,849 $13,623 $24,534 $14,607
Avg. Ann. Total Return (12/31/03) 4 +52.70% +22.06% +4.74%
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ONGOING MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE; MORE
RECENT RETURNS MAY DIFFER FROM THOSE SHOWN. SINCE MARKETS CAN GO DOWN AS WELL AS
UP, INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET CONDITIONS,
AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES.

FOR MORE CURRENT PERFORMANCE, SEE "FUNDS AND PERFORMANCE" AT
FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236.

Semiannual Report | Past performance does not guarantee future results. | 9

PERFORMANCE SUMMARY (CONTINUED)

ENDNOTES

INVESTING IN A NON-DIVERSIFIED FUND CONCENTRATING IN THE PRECIOUS METALS SECTOR
INVOLVES SPECIAL RISKS, INCLUDING THOSE RELATED TO FLUCTUATIONS IN THE PRICE OF
GOLD AND OTHER PRECIOUS METALS AND INCREASED SUSCEPTIBILITY TO ADVERSE ECONOMIC
AND REGULATORY DEVELOPMENTS AFFECTING THE SECTOR. THE FUND MAY ALSO INVEST IN
FOREIGN COMPANIES, INCLUDING IN DEVELOPING MARKETS, WHICH CAN INVOLVE EXPOSURE
TO CURRENCY VOLATILITY AND POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY. THE
FUND'S PROSPECTUS ALSO INCLUDES A DESCRIPTION OF THE MAIN INVESTMENT RISKS.

CLASS A: Subject to the current, maximum 5.75% initial sales charge.
Prior to 8/3/98, Fund shares were offered at a lower initial
sales charge; thus actual total returns may differ. Effective
5/1/94, the Fund implemented a Rule 12b-1 plan, which affects
subsequent performance.

CLASS B: Subject to no initial sales charge, but subject to a contingent
deferred sales charge (CDSC) declining from 4% to 0% over six
years. These shares have higher annual fees and expenses than
Class A shares.

CLASS C: Subject to no initial sales charge, but subject to 1% CDSC for
shares redeemed within 12 months of investment. Prior to 1/1/04,
these shares were offered with an initial sales charge; thus
actual returns would have differed. These shares have higher
annual fees and expenses than Class A shares.

ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees; shares are
available to a limited class of investors.

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes any current, applicable,
maximum sales charge(s). Six-month return has not been annualized.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include any current, applicable, maximum
sales charge(s).
4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.
5. Effective 1/2/97, the Fund began offering Advisor Class shares, which do not
have sales charges or a Rule 12b-1 plan. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 1/2/97, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge, but reflecting the effect of
the Class A Rule 12b-1 fees; and (b) for periods after 1/1/97, actual Advisor
Class performance is used reflecting all charges and fees applicable to that
class. Since 1/2/97 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were +51.01% and +5.99%.

10 | Past performance does not guarantee future results. | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 2004 YEAR ENDED JULY 31,
CLASS A (UNAUDITED) 2003 2002 2001 2000 1999
--------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............. $13.74 $10.28 $ 8.88 $7.90 $8.30 $7.48
--------------------------------------------------------------------------------
Income from investment operations:

Net investment income a ......................... .05 .13 .13 .25 .10 .07

Net realized and unrealized gains (losses) ...... 3.85 3.44 1.52 .84 (.46) .79
--------------------------------------------------------------------------------
Total from investment operations ................. 3.90 3.57 1.65 1.09 (.36) .86
--------------------------------------------------------------------------------
Less distributions from net
investment income ............................... (.10) (.11) (.25) (.11) (.04) (.04)
--------------------------------------------------------------------------------
Net asset value, end of period ................... $17.54 $13.74 $10.28 $8.88 $7.90 $8.30
================================================================================

Total return b ................................... 28.39% 34.97% 18.97% 13.91% (4.42)% 11.51%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ................ $410,233 $306,283 $200,627 $164,004 $156,236 $205,889

Ratios to average net assets:

Expenses ........................................ 1.00% c 1.09% 1.13% 1.32% 1.34% 1.31%

Net investment income ........................... .54% c 1.05% 1.18% 2.86% 1.17% .85%

Portfolio turnover rate .......................... 4.18% 6.59% 12.77% 7.31% 3.53% 4.29%

<FN>
a Based on average daily shares outstanding.
b Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
c Annualized.
</FN>

Semiannual Report | 11

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL HIGHLIGHTS (CONTINUED)

--------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 2004 YEAR ENDED JULY 31,
CLASS B (UNAUDITED) 2003 2002 2001 2000 1999 c
--------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............. $13.46 $10.11 $ 8.76 $7.82 $8.26 $7.72
--------------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................. (.02) .02 .01 .17 .01 (.04)

Net realized and unrealized gains (losses) ...... 3.77 3.41 1.55 .83 (.41) .58
--------------------------------------------------------------------------------
Total from investment operations ................. 3.75 3.43 1.56 1.00 (.40) .54
--------------------------------------------------------------------------------
Less distributions from net
investment income ............................... (.05) (.08) (.21) (.06) (.04) --
--------------------------------------------------------------------------------
Net asset value, end of period ................... $17.16 $13.46 $10.11 $8.76 $7.82 $8.26
================================================================================

Total return b ................................... 27.88% 34.08% 18.14% 12.78% (4.90)% 6.99%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ................ $41,044 $26,278 $10,964 $4,037 $2,779 $1,217

Ratios to average net assets:

Expenses ........................................ 1.75% d 1.85% 1.89% 2.08% 2.10% 2.10% d

Net investment income (loss) .................... (.21)% d .29% .12% 1.88% .17% (.84)% d

Portfolio turnover rate .......................... 4.18% 6.59% 12.77% 7.31% 3.53% 4.29%

<FN>
a Based on average daily shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is not
annualized for periods less than one year.
c For the period January 1, 1999 (effective date) to July 31, 1999.
d Annualized.
</FN>

12 | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL HIGHLIGHTS (CONTINUED)

--------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 2004 YEAR ENDED JULY 31,
CLASS C (UNAUDITED) 2003 2002 2001 2000 1999
--------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............. $13.59 $10.18 $ 8.80 $7.83 $8.23 $7.43
--------------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................. (.03) .04 .04 .18 .03 .01

Net realized and unrealized gains (losses) ...... 3.81 3.43 1.53 .83 (.43) .80
--------------------------------------------------------------------------------
Total from investment operations ................. 3.78 3.47 1.57 1.01 (.40) .81
--------------------------------------------------------------------------------
Less distributions from net
investment income ............................... (.04) (.06) (.19) (.04) -- c (.01)
--------------------------------------------------------------------------------
Net asset value, end of period ................... $17.33 $13.59 $10.18 $8.80 $7.83 $8.23
================================================================================

Total return b ................................... 27.80% 34.16% 18.09% 12.89% (4.85)% 10.85%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ................ $107,359 $65,729 $38,219 $22,220 $20,721 $23,473

Ratios to average net assets:

Expenses ........................................ 1.75% d 1.82% 1.88% 2.07% 2.10% 2.07%

Net investment income (loss) .................... (.21)% d .32% .35% 2.11% .36% .08%

Portfolio turnover rate .......................... 4.18% 6.59% 12.77% 7.31% 3.53% 4.29%

<FN>
a Based on average daily shares outstanding.
b Total return does not reflect the contingent deferred sales charge, and is not
annualized for periods less than one year.
c Includes distributions from net investment income in the amount of $.001.
d Annualized.
</FN>

Semiannual Report | 13

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL HIGHLIGHTS (CONTINUED)

--------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 2004 YEAR ENDED JULY 31,
ADVISOR CLASS (UNAUDITED) 2003 2002 2001 2000 1999
--------------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............. $14.08 $10.53 $ 9.09 $8.09 $8.49 $7.61
--------------------------------------------------------------------------------
Income from investment operations:

Net investment income a ......................... .06 .09 .15 .28 .11 .08

Net realized and unrealized gains (losses) ...... 3.97 3.60 1.56 .85 (.46) .85
--------------------------------------------------------------------------------
Total from investment operations ................. 4.03 3.69 1.71 1.13 (.35) .93
--------------------------------------------------------------------------------
Less distributions from net
investment income ............................... (.13) (.14) (.27) (.13) (.05) (.05)
--------------------------------------------------------------------------------
Net asset value, end of period ................... $17.98 $14.08 $10.53 $9.09 $8.09 $8.49
================================================================================

Total return ..................................... 28.49% 35.38% 19.38% 14.04% (4.21)% 12.30%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) ................ $42,534 $21,223 $5,573 $3,574 $3,715 $3,204

Ratios to average net assets:

Expenses ........................................ .75% b .85% .90% 1.08% 1.10% 1.08%

Net investment income ........................... .79% b 1.29% 1.29% 3.15% 1.24% .98%

Portfolio turnover rate .......................... 4.18% 6.59% 12.77% 7.31% 3.53% 4.29%

<FN>
a Based on average daily shares outstanding.
b Annualized.
</FN>

14 | See notes to financial statements. | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

STATEMENT OF INVESTMENTS, JANUARY 31, 2004 (UNAUDITED)

- ----------------------------------------------------------------------------------------------------------------------------
COUNTRY SHARES/WARRANTS VALUE
- ----------------------------------------------------------------------------------------------------------------------------

COMMON STOCKS, RIGHTS AND WARRANTS 94.2%
GOLD AND DIVERSIFIED RESOURCES 8.5%
Anglo American PLC ............................................. United Kingdom 256,100 $ 5,822,362
Anglo American PLC, ADR ........................................ United Kingdom 420,479 9,667,233
a Coeur D'Alene Mines Corp. ...................................... United States 550,000 2,997,500
Freeport-McMoRan Copper & Gold Inc., B ......................... United States 762,011 28,087,725
Rio Tinto PLC .................................................. United Kingdom 170,401 4,528,477
a Sociedad Minera El Brocal SA ................................... Peru 1,006 2,314
--------------
51,105,611
--------------

GOLD EXPLORATION 2.9%
a Gabriel Resources Ltd. ......................................... Canada 348,000 1,033,223
Highland Gold Mining Ltd ....................................... United Kingdom 250,000 1,217,281
a Ivanhoe Mines Ltd. ............................................. Canada 868,600 6,359,113
a Ivanhoe Mines Ltd, wts., 12/19/05 .............................. Canada 159,300 323,294
a Metallica Resources Inc. ....................................... Canada 988,998 1,568,540
a Metallica Resources Inc., wts., 12/11/08 ....................... Canada 494,499 223,015
a,c Miramar Mining Corp., Restricted Shares ........................ Canada 330,000 651,914
a Miramar Mining Corp. (cad) ..................................... Canada 1,000,000 2,097,114
a,c Miramar Mining Corp., Restricted wts., 6/09/05 ................. Canada 165,000 13,394
a Nevsun Resources Ltd. .......................................... Canada 654,100 2,340,286
a,c Semafo Inc., Restricted Shares ................................. Canada 2,450,000 1,670,287
a Semafo Inc. .................................................... Canada 286,100 208,597
a,c Semafo Inc., 144A, Restricted, wts., 12/18/06 .................. Canada 1,225,000 123,384
--------------
17,829,442
--------------
LONG LIFE GOLD MINES 59.0%
Agnico-Eagle Mines Ltd. ........................................ Canada 425,000 5,418,750
AngloGold Ltd. ................................................. South Africa 182,530 7,408,840
AngloGold Ltd., ADR ............................................ South Africa 448,617 18,092,724
a Ashanti Goldfields Co. Ltd., GDR, Reg S ........................ Ghana 3,002,450 34,137,856
Barrick Gold Corp. ............................................. Canada 2,405,371 47,385,809
Compania de Minas Buenaventura SA .............................. Peru 100,593 2,340,174
Compania de Minas Buenaventura SA, ADR ......................... Peru 1,038,986 24,312,272
Gold Fields Ltd. ............................................... South Africa 704,999 9,073,637
Gold Fields Ltd., ADR .......................................... South Africa 389,528 5,013,225
Harmony Gold Mining Ltd., ADR .................................. South Africa 200,000 3,054,000
Harmony Gold Mining Co. Ltd. ................................... South Africa 2,093,000 32,265,573
Lihir Gold Ltd. ................................................ Papua New Guinea 8,566,841 8,475,759
Lihir Gold Ltd., ADR, 144A ..................................... Papua New Guinea 50,000 1,020,500
a Meridian Gold Inc. ............................................. Canada 2,085,260 27,101,768
Newcrest Mining Ltd. ........................................... Australia 3,455,050 29,897,120
Newmont Mining Corp. ........................................... United States 1,020,914 42,531,277
a Oxiana Ltd. .................................................... Australia 7,906,124 5,294,938
a Oxiana Ltd., rts., 2/19/04 ..................................... Australia 1,976,531 130,869
Placer Dome Inc. ............................................... Canada 2,418,755 38,240,517
a Randgold Resources Ltd., ADR ................................... United States 498,800 10,983,576
a Western Areas Ltd. ............................................. South Africa 402,225 2,400,409
a Western Areas Ltd., ADR ........................................ South Africa 26,430 157,730
--------------
354,737,323
--------------

Semiannual Report | 15

FRANKLIN GOLD AND PRECIOUS METALS FUND

STATEMENT OF INVESTMENTS, JANUARY 31, 2004 (UNAUDITED) (CONTINUED)

COMMON STOCKS, RIGHTS AND WARRANTS (CONT.)
MEDIUM LIFE GOLD MINES 13.2%
a Apollo Gold Corp. .............................................. Canada 1,150,000 $ 2,264,732
a Glamis Gold Ltd. ............................................... Canada 841,000 12,615,000
a Eldorado Gold Corp. ............................................ Canada 860,000 2,391,762
Kingsgate Consolidated Ltd. .................................... Australia 1,855,148 4,941,527
a Kinross Gold Corp. ............................................. Canada 2,663,012 18,615,463
a Northgate Exploration Ltd. ..................................... Canada 1,300,000 2,618,761
a Queenstake Resources Ltd. ...................................... Canada 5,000,000 2,705,953
a Rio Narcea Gold Mines Ltd. ..................................... Canada 1,100,000 2,480,457
a Sons of Gwalia Ltd. ............................................ Australia 2,980,500 8,347,405
a Wheaton River Minerals Ltd. .................................... Canada 5,250,000 13,851,097
a Wheaton River Minerals Ltd., wts., 5/30/07 ..................... Canada 1,312,500 1,992,822
a Yamana Gold Inc. ............................................... Canada 2,300,000 5,030,818
a Yamana Gold Inc., wts., 7/31/08 ................................ Canada 1,150,000 1,512,703
--------------
79,368,500
--------------
PLATINUM & PALLADIUM 10.6%
Anglo American Platinum Corp. Ltd., ADR ........................ South Africa 571,138 26,492,242
Impala Platinum Holdings Ltd. .................................. South Africa 194,000 15,692,841
Impala Platinum Holdings Ltd., ADR ............................. South Africa 385,600 15,595,772
a North American Palladium Ltd. .................................. Canada 377,500 3,021,929
a Stillwater Mining Co. .......................................... United States 253,246 2,902,199
--------------
63,704,983
--------------
TOTAL COMMON STOCKS, RIGHTS AND WARRANTS (COST $366,266,109) ... 566,745,859
--------------
SHORT TERM INVESTMENTS (COST $27,686,498) 4.6%
b Franklin Institutional Fiduciary Trust Money Market Portfolio .. United States 27,686,498 27,686,498
--------------

MUTUAL FUNDS (COST $6,996,900) 1.3%
FOREIGN EQUITY
Central Fund Canada- Class A ................................... Canada 1,405,000 7,615,100
--------------
TOTAL INVESTMENTS (COST $400,949,507) 100.1% ................... 602,047,457
OTHER ASSETS, LESS LIABILITIES (.1)% ........................... (877,257)
--------------
NET ASSETS 100.0% .............................................. $601,170,200
==============

<FN>
a Non-income producing.
b See Note 6 regarding investments in the Franklin Institutional Fiduciary Trust
Money Market Portfolio.
c See Note 7 regarding restricted securities.
</FN>

16 | See notes to financial statements. | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
January 31, 2004 (unaudited)

Assets:
Investments in securities:
Cost ................................................................................................. $400,949,507
--------------
Value ................................................................................................ 602,047,457
Receivables:
Investment securities sold .......................................................................... 2,047,716
Capital shares sold .................................................................................. 4,108,093
Dividends and interest ............................................................................... 152,402
--------------
Total assets ..................................................................................... 608,355,668
--------------
Liabilities:
Payables:
Investment securities purchased ...................................................................... 1,649,295
Capital shares redeemed .............................................................................. 4,719,646
Affiliates ........................................................................................... 697,997
Other liabilities ..................................................................................... 118,530
--------------
Total liabilities ................................................................................ 7,185,468
--------------
Net assets, at value ........................................................................... $601,170,200
Net assets consist of:
Undistributed net investment income ................................................................... $ 1,053,820
Net unrealized appreciation (depreciation) ............................................................ 201,126,720
Accumulated net realized gain (loss) .................................................................. (47,857,595)
Capital shares ........................................................................................ 446,847,255
--------------
Net assets, at value ........................................................................... $601,170,200
==============

Semiannual Report | 17

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
January 31, 2004 (unaudited)

CLASS A:
Net assets, at value .................................................................................. $410,232,731
--------------
Shares outstanding .................................................................................... 23,384,207
--------------
Net asset value per share a ........................................................................... $17.54
--------------
Maximum offering price per share (Net asset value per share / 94.25%) ................................. $18.61
--------------
CLASS B:
Net assets, at value .................................................................................. $ 41,044,400
--------------
Shares outstanding .................................................................................... 2,391,290
--------------
Net asset value and maximum offering price per share a ................................................ $17.16
--------------
CLASS C:
Net assets, at value .................................................................................. $107,358,807
--------------
Shares outstanding .................................................................................... 6,195,381
--------------
Net asset value per share a ........................................................................... $17.33
--------------
ADVISOR CLASS:
Net assets, at value .................................................................................. $ 42,534,262
--------------
Shares outstanding .................................................................................... 2,365,292
--------------
Net asset value and maximum offering price per share .................................................. $17.98
--------------

<FN>
a Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
</FN>

18 | See notes to financial statements. | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended January 31, 2004 (unaudited)

Investment income:
(net of foreign taxes of $79,677)
Dividends ............................................................................................. $ 4,309,896
Interest .............................................................................................. 2,290
--------------
Total investment income .......................................................................... 4,312,186
Expenses:
Management fees (Note 3) .............................................................................. 1,361,847
Distribution fees (Note 3)
Class A .............................................................................................. 481,486
Class B .............................................................................................. 193,048
Class C .............................................................................................. 486,956
Transfer agent fees (Note 3) .......................................................................... 543,900
Custodian fees ........................................................................................ 69,074
Reports to shareholders ............................................................................... 44,715
Registration and filing fees .......................................................................... 50,260
Professional fees ..................................................................................... 11,481
Trustees' fees and expenses ........................................................................... 10,500
Other ................................................................................................. 3,848
--------------
Total expenses ................................................................................... 3,257,115
--------------
Net investment income .......................................................................... 1,055,071
--------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments .......................................................................................... 3,030,939
Foreign currency transactions ........................................................................ 14,817
--------------
Net realized gain (loss) ....................................................................... 3,045,756
--------------
Net unrealized appreciation (depreciation) on:
Investment ........................................................................................... 110,694,489
Translation of assets and liabilities denominated in foreign currencies .............................. (3,915)
--------------
Net unrealized appreciation (depreciation) ..................................................... 110,690,574
--------------
Net realized and unrealized gain (loss) ................................................................ 113,736,330
--------------
Net increase (decrease) in net assets resulting from operations ........................................ $114,791,401
==============

Semiannual Report | See notes to financial statements. | 19

FRANKLIN GOLD AND PRECIOUS METALS FUND

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
for the six months ended January 31, 2004 (unaudited)
and the year ended July 31, 2003

--------------------------------------
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2004 JULY 31, 2003
--------------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income (loss) .......................................................... $ 1,055,071 $ 3,055,697
Net realized gain (loss) from investments and foreign currency transactions ........... 3,045,756 (4,829,414)
Net unrealized appreciation (depreciation) on investments and translation of assets
and liabilities denominated in foreign currency ...................................... 110,690,574 98,025,903
----------------------------------
Net increase (decrease) in net assets resulting from operations ................... 114,791,401 96,252,186
Distributions to shareholders from:
Net investment income:
Class A .............................................................................. (2,303,565) (2,293,660)
Class B .............................................................................. (108,625) (118,232)
Class C .............................................................................. (236,649) (251,973)
Advisor Class ........................................................................ (253,014) (72,571)
----------------------------------
Total distributions to shareholders .................................................... (2,901,853) (2,736,436)
Capital share transactions: (Note 2)
Class A .............................................................................. 23,603,932 35,230,740
Class B .............................................................................. 7,275,925 10,718,114
Class C .............................................................................. 23,218,721 13,422,528
Advisor Class 15,668,133 11,243,440
----------------------------------
Total capital share transactions ....................................................... 69,766,711 70,614,822
Net increase (decrease) in net assets ............................................. 181,656,259 164,130,572
Net assets:
Beginning of period .................................................................... 419,513,941 255,383,369
----------------------------------
End of period .......................................................................... $601,170,200 $419,513,941
==================================
Undistributed net investment income included in net assets:
End of period .......................................................................... $ 1,053,820 $ 2,900,602
==================================

20 | See notes to financial statements. | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Gold and Precious Metals Fund (the Fund) is registered under the
Investment Company Act of 1940 as a non-diversified, open-end investment
company. The Fund seeks capital growth and income by investing at least 80% of
total net assets in securities of companies that mine, process or deal in gold
or other precious metals.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the last reported sales price. Over-the-counter securities and listed
securities for which no sale is reported are valued within the range of the
latest quoted bid and asked prices. Investments in open-end mutual funds are
valued at the closing net asset value. Foreign securities are valued at the
close of trading of the foreign exchange or the NYSE, whichever is earlier. If
events occur that materially affect the values of securities after the prices or
foreign exchange rates are determined, or if market quotations are not readily
available, the securities will be valued at fair value as determined following
procedures approved by the Board of Trustees.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.

C. INCOME TAXES

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.

D. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Dividend income and
distributions to shareholders are recorded on the ex-dividend date.

Semiannual Report | 21

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
(CONTINUED)

Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.

E. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

F. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Fund. Additionally, in the normal course of business, the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience the Fund expects the
risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

The Fund offers four classes of shares: Class A, Class B, Class C, and Advisor
Class. Each class of shares differs by its initial sales load, contingent
deferred sales charges, distribution fees, voting rights on matters affecting a
single class and its exchange privilege.

At January 31, 2004, there were an unlimited number of shares authorized ($.10
par value). Transactions in the Fund's shares were as follows:

-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2004 JULY 31, 2003
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------

CLASS A SHARES:
Shares sold ................................. 9,390,988 $163,571,082 16,656,770 $203,119,760
Shares issued on reinvestment of
distributions .............................. 100,250 1,994,988 184,327 2,003,492
Shares redeemed ............................. (8,394,632) (141,962,138) (14,078,537) (169,892,512)
-----------------------------------------------------------------
Net increase (decrease) ..................... 1,096,506 $ 23,603,932 2,762,560 $ 35,230,740
=================================================================
CLASS B SHARES:
Shares sold ................................. 1,011,617 $ 17,171,119 1,491,869 $ 17,975,850
Shares issued on reinvestment of
distributions .............................. 5,064 98,798 10,078 107,837
Shares redeemed ............................. (578,167) (9,993,992) (633,983) (7,365,573)
-----------------------------------------------------------------
Net increase (decrease) ..................... 438,514 $ 7,275,925 867,964 $ 10,718,114
=================================================================

22 | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONTINUED)

CLASS C SHARES:
Shares sold ................................. 2,409,613 $ 41,138,866 2,475,924 $ 30,074,772
Shares issued on reinvestment of
distributions ............................... 9,915 195,335 18,783 202,855
Shares redeemed ............................. (1,062,499) (18,115,480) (1,410,209) (16,855,099)
-----------------------------------------------------------------
Net increase (decrease) ..................... 1,357,029 $ 23,218,721 1,084,498 $ 13,422,528
=================================================================
ADVISOR CLASS SHARES:
Shares sold ................................. 1,023,704 $ 18,465,130 1,354,547 $ 16,005,126
Shares issued on reinvestment of
distributions ............................... 11,945 243,798 6,238 69,364
Shares redeemed ............................. (177,175) (3,040,795) (383,473) (4,831,050)
-----------------------------------------------------------------
Net increase (decrease) ..................... 858,474 $ 15,668,133 977,312 $ 11,243,440
=================================================================

3. TRANSACTIONS WITH AFFILIATES

Certain officers and trustees of the Fund are also officers and/or directors of
the following entities:

- ------------------------------------------------------------------------------------------------------------------
ENTITY AFFILIATION
- ------------------------------------------------------------------------------------------------------------------

Franklin Advisers Inc. (Advisers) Investment manager
Franklin Templeton Services LLC (FT Services) Administrative manager
Franklin/Templeton Distributors Inc. (Distributors) Principal underwriter
Franklin/Templeton Investor Services LLC (Investor Services) Transfer agent

The Fund pays an investment management fee to Advisers based on the net assets
of the Fund as follows:

- --------------------------------------------------------------------------------
ANNUALIZED FEE RATE AVERAGE MONTHLY NET ASSETS
- --------------------------------------------------------------------------------
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% In excess of $250 million

Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.

The Fund reimburses Distributors up to .25%, 1.00%, and 1.00% per year of the
average daily net assets of Class A, Class B, and Class C, respectively, for
costs incurred in marketing the Fund's shares.

Distributors paid net commissions on sales of Fund shares, and received
contingent deferred sales charges for the period of $803,979 and $95,286,
respectively.

The Fund paid transfer agent fees of $543,900, of which $332,308 was paid to
Investor Services.

Semiannual Report | 23

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4. INCOME TAXES

At January 31, 2004, the cost of investments, net unrealized appreciation
(depreciation) and undistributed ordinary income for income tax purposes were as
follows:

Cost of investments ..................................... $401,348,363
--------------

Unrealized appreciation ................................. 211,808,429
Unrealized depreciation ................................. (11,109,336)
--------------
Net unrealized appreciation (depreciation) $200,699,093
==============

At July 31, 2003, the Fund had tax basis capital losses of $45,700,262, which
may be carried over to offset future capital gains. Such losses expire as
follows:

Capital loss carryovers expiring in:
2005 ................................................... $ 4,474,120
2006 ................................................... 8,665,097
2007 ................................................... 28,763,977
2008 ................................................... 2,754,018
2009 ................................................... 1,043,050
-------------
$45,700,262
=============

At July 31, 2003, the Fund had deferred capital and currency losses occurring
subsequent to October 31, 2002 of $4,586,240 and $217,993 respectively. For tax
purposes, such losses will be reflected in the year ending July 31, 2004.

Net investment income differs for financial statement and tax purposes primarily
due to differing treatment of foreign currency transactions and passive foreign
investment company shares.

Net realized losses differ for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions, wash sales and
losses realized subsequent to October 31, 2002 on the sales of securities and
foreign currencies.

5. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the
period ended January 31, 2004 aggregated $88,969,054 and $21,672,489,
respectively.

6. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (the Sweep Money Fund), an open-end investment company managed by
Advisers. Management fees paid by the Fund are reduced on assets invested in the
Sweep Money Fund, in an amount not to exceed the management fees paid by the
Sweep Money Fund. For the period ended January 31, 2004, the Fund earned
$120,900 of dividend income from investment in the Sweep Money Fund.

24 | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

7. RESTRICTED SECURITIES

At January 31, 2004, investments in securities included issues that are
restricted or illiquid. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. At January 31, 2004, the Fund held
investments in restricted and illiquid securities that were valued under
approved methods by the Trustees, as follows:

- -----------------------------------------------------------------------------------------------------------
NUMBER ACQUISITION
OF SHARES ISSUER DATE COST VALUE
- -----------------------------------------------------------------------------------------------------------

330,000 Miramar Mining Corp., Restricted Shares .... 10/03/03 $ 753,314 $ 651,914
165,000 Miramar Mining Corp., Restricted,
wts., 6/09/05 ............................. 12/05/03 17,537 13,394
2,450,000 Semafo Inc., Restricted Shares ............. 12/18/03 2,004,229 1,670,287
1,225,000 Semafo Inc., 144A, Restricted,
wts., 12/18/06 ............................ 12/18/03 21,630 123,384
---------------------------
TOTAL RESTRICTED SECURITIES (.41% OF NET ASSETS) ........... $2,796,710 $2,458,979
===========================

8. REGULATORY MATTERS

On February 4, 2004, the Securities Division of the Office of the Secretary of
the Commonwealth of Massachusetts filed an administrative complaint against
Franklin Resources, Inc. and certain of its subsidiaries (the "Company"),
alleging violations of the Massachusetts Uniform Securities Act. The complaint
arises from activity that occurred in 2001 during which time an officer of a
Company subsidiary was negotiating an agreement with an investor relating to
investments in a mutual fund and a hedge fund.

Semiannual Report | 25

FRANKLIN GOLD AND PRECIOUS METALS FUND

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8. REGULATORY MATTERS (CONTINUED)

The Fund, in addition to other entities within Franklin Templeton Investments,
including the Company and other funds, has been named in shareholder class
actions related to the matter described above. The Fund's management believes
that the claims made in the lawsuit are without merit and it intends to defend
vigorously against the allegations. It is anticipated that the Fund may be named
in additional similar civil actions related to the matter described above.

In addition, as part of ongoing investigations by the U.S. Securities and
Exchange Commission (the "SEC"), the U.S. Attorney for the Northern District of
California, the New York Attorney General, the California Attorney General, the
U.S. Attorney for the District of Massachusetts, the Florida Department of
Financial Services, and the Commissioner of Securities and the Attorney General
of the State of West Virginia, relating to certain practices in the mutual fund
industry, including late trading, market timing and sales compensation
arrangements, the Company and its subsidiaries, as well as certain current or
former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees are providing documents and information in response to
these requests and subpoenas. In addition, the Company has responded to requests
for similar kinds of information from regulatory authorities in some of the
foreign countries where the Company conducts its global asset management
business.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against the Fund's investment adviser
relating to the frequent trading issues that are the subject of the SEC's
investigation. These issues were previously disclosed as being under
investigation by government authorities and the subject of an internal inquiry
by the Company in its Annual Report on Form 10-K and on its public website. The
Company currently is in discussions with the SEC Staff in an effort to resolve
the issues raised in their investigation. Such discussions are preliminary and
the Fund's management has been advised that the Company cannot predict the
likelihood of whether those discussions will result in a settlement and, if so,
the terms of such settlement. The impact, if any, of these matters on the Fund
is uncertain at this time. If the Company finds that it bears responsibility for
any unlawful or improper conduct, it has committed to making the Fund or its
shareholders whole, as appropriate.

26 | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

TAX DESIGNATION (UNAUDITED)

At July 31, 2003, more than 50% of the Franklin Gold and Precious Metals Fund
total assets were invested in securities of foreign issuers. In most instances,
foreign taxes were withheld from dividends paid to the Fund on these
investments. As shown in the table below the Fund hereby designates to
shareholders the foreign source income and foreign taxes paid, pursuant to
Section 853 of the Internal Revenue Code. This designation will allow
shareholders of record on November 28, 2003, to treat their proportionate share
of foreign taxes paid by the Fund as having been paid directly by them. The
shareholder shall consider these amounts as foreign taxes paid in the tax year
in which they receive the Fund distribution.

The following tables provide a detailed analysis, by country, of Foreign Tax
Paid, Foreign Source Income, Foreign Qualified Dividends and Adjusted Foreign
Source Income as designated by the Fund, to Class A, Class B, Class C, and
Advisor Class shareholders. As a service to individual shareholders filing Form
1116, "Adjusted Foreign Source Income per Share" in column 4 below reports
foreign source income with the required adjustments to foreign source qualified
dividends. This information is provided to simplify your reporting of foreign
source income for line 1 of Form 1116.

- ---------------------------------------------------------------------------------------------------------------------
CLASS A
ADJUSTED
FOREIGN TAX FOREIGN FOREIGN FOREIGN
PAID SOURCE INCOME QUALIFIED DIVIDENDS SOURCE INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------

Australia ................................. 0.0005 0.0064 0.0013 0.0057
Canada .................................... 0.0029 0.0096 0.0051 0.0067
Papua New Guinea .......................... 0.0003 0.0016 0.0002 0.0015
Peru ...................................... 0.0001 0.0029 0.0013 0.0022
South Africa .............................. 0.0000 0.0737 0.0329 0.0549
United Kingdom ............................ 0.0016 0.0077 0.0049 0.0049
--------------------------------------------------------------------
TOTAL ..................................... $0.0054 $0.1019 $0.0457 $0.0759
====================================================================

- ---------------------------------------------------------------------------------------------------------------------
CLASS B
ADJUSTED
FOREIGN TAX FOREIGN FOREIGN FOREIGN
PAID SOURCE INCOME QUALIFIED DIVIDENDS SOURCE INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------

Australia ................................. 0.0005 0.0032 0.0007 0.0028
Canada .................................... 0.0029 0.0048 0.0025 0.0034
Papua New Guinea .......................... 0.0003 0.0008 0.0001 0.0007
Peru ...................................... 0.0001 0.0015 0.0007 0.0011
South Africa .............................. 0.0000 0.0374 0.0167 0.0279
United Kingdom ............................ 0.0016 0.0039 0.0025 0.0025
--------------------------------------------------------------------
TOTAL ..................................... $0.0054 $0.0516 $0.0232 $0.0384
====================================================================

Semiannual Report | 27

FRANKLIN GOLD AND PRECIOUS METALS FUND

TAX DESIGNATION (UNAUDITED) (CONTINUED)

- ---------------------------------------------------------------------------------------------------------------------
CLASS C
ADJUSTED
FOREIGN TAX FOREIGN FOREIGN FOREIGN
PAID SOURCE INCOME QUALIFIED DIVIDENDS SOURCE INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------

Australia ................................. 0.0005 0.0029 0.0006 0.0026
Canada .................................... 0.0029 0.0044 0.0023 0.0031
Papua New Guinea .......................... 0.0003 0.0007 0.0001 0.0006
Peru ...................................... 0.0001 0.0013 0.0006 0.0010
South Africa .............................. 0.0000 0.0339 0.0151 0.0253
United Kingdom ............................ 0.0016 0.0035 0.0022 0.0022
--------------------------------------------------------------------
TOTAL ..................................... $0.0054 $0.0467 $0.0209 $0.0348
====================================================================

- ---------------------------------------------------------------------------------------------------------------------
ADVISOR CLASS
ADJUSTED
FOREIGN TAX FOREIGN FOREIGN FOREIGN
PAID SOURCE INCOME QUALIFIED DIVIDENDS SOURCE INCOME
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE
- ---------------------------------------------------------------------------------------------------------------------

Australia ................................. 0.0005 0.0079 0.0017 0.0069
Canada .................................... 0.0029 0.0119 0.0063 0.0083
Papua New Guinea .......................... 0.0003 0.0020 0.0002 0.0019
Peru ...................................... 0.0001 0.0036 0.0017 0.0026
South Africa .............................. 0.0000 0.0918 0.0410 0.0684
United Kingdom ............................ 0.0016 0.0095 0.0060 0.0061
--------------------------------------------------------------------
TOTAL ..................................... $0.0054 $0.1267 $0.0569 $0.0942
====================================================================

Foreign Tax Paid per Share (Column 1) is the amount per share available to you,
as a tax credit or deduction (assuming you held your shares in the fund for a
minimum of 16 days during the 30-day period beginning 15 days before the
ex-dividend date of the fund's distribution to which the foreign taxes relate).

Foreign Source Income per Share (Column 2) is the amount per share of income
dividends paid to you that is attributable to foreign securities held by the
fund, plus any foreign taxes withheld on these dividends. The amounts reported
include foreign source qualified dividends without adjustment for the lower U.S.
tax rates. Generally, this is the foreign source income to be reported by
certain trusts and corporate shareholders.

Foreign Qualified Dividends per Share (Column 3) is the amount per share of
foreign source qualified dividends the fund paid to you, plus any foreign taxes
withheld on these dividends. These amounts represent the portion of the Foreign
Source Income reported to you in column 2 that were derived from qualified
foreign securities held by the fund. If you are an individual shareholder who
does not meet the qualified dividend holding period requirements, you may find
this information helpful to calculate the foreign source income adjustment
needed to complete line 1 of Form 1116.

Adjusted Foreign Source Income per Share (Column 4) is the adjusted amount per
share of foreign source income the fund paid to you. These amounts reflect the
Foreign Source Income reported in column 2 adjusted for the tax rate
differential on foreign source qualified dividends that may be required for
certain individual shareholders pursuant to Internal Revenue Code 904(b)(2)(B).
If you

28 | Semiannual Report

FRANKLIN GOLD AND PRECIOUS METALS FUND

TAX DESIGNATION (UNAUDITED) (CONTINUED)

are an individual shareholder who meets the qualified dividend holding period
requirements, generally, these Adjusted Foreign Source Income amounts may be
reported directly on line 1 of Form 1116 without additional adjustment.

In January 2004, shareholders received Form 1099-DIV which included their share
of taxes paid and foreign source income distributed during the calendar year
2003. The Foreign Source Income reported on Form 1099-DIV was reduced to take
into account the tax rate differential on foreign source qualified dividend
income pursuant to Internal Revenue Code 904(b)(2)(B). Shareholders are advised
to check with their tax advisors for information on the treatment of these
amounts on their 2003 individual income tax returns.

Semiannual Report | 29

FRANKLIN GOLD AND PRECIOUS METALS FUND

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group.

30 | Semiannual Report

This page intentionally left blank.

LITERATURE REQUEST

For a brochure and prospectus, which contains more complete information,
including charges, expenses and risks, call Franklin Templeton Investments at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, we may
monitor, record and access telephone calls to or from our service departments.
These calls can be identified by the presence of a regular beeping tone.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL
Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 1

VALUE
Franklin Balance Sheet Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 2
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 3
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 4

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Franklin Technology Fund
Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund

TARGET FUNDS
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

INCOME
Franklin Adjustable U.S. Government
Securities Fund 5
Franklin's AGE High Income Fund
Franklin Federal Money Fund 5, 6
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 3
Franklin Income Fund
Franklin Money Fund 5, 6
Franklin Short-Intermediate U.S. Government
Securities Fund 5
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund 5
Templeton Global Bond Fund

TAX-FREE INCOME 7
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 8
Tax-Exempt Money Fund 5, 6

LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC 7
Alabama Michigan 8
Arizona Minnesota 8
California 9 Missouri
Colorado New Jersey
Connecticut New York 9
Florida 9 North Carolina
Georgia Ohio 8
Kentucky Oregon
Louisiana Pennsylvania
Maryland Tennessee
Massachusetts 8 Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance
Products Trust 10

1.The fund is closed to new investors. Existing shareholders can continue adding
to their accounts.
2.The fund is only open to existing shareholders as well as select retirement
plans.
3.The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.
4.Upon reaching approximately $350 million in assets, the fund intends to close
to all investors.
5.An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
6.No assurance exists that the fund's $1.00 per share price will be maintained.
It is possible to lose money by investing in the fund.
7.For investors subject to the alternative minimum tax, a small portion of fund
dividends may be taxable. Distributions of capital gains are generally taxable.
8.Portfolio of insured municipal securities.
9.These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
limited-term, intermediate-term and money market portfolios (CA and NY).
10.The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

02/04 Not part of the semiannual report

[LOGO OMITTED](R)
FRANKLIN(R) TEMPLETON(R) One Franklin Parkway
INVESTMENTS San Mateo, CA 94403-1906

[ ] WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?
Eligible shareholders can sign up for eDelivery at
franklintempleton.com. See inside for details.

SEMIANNUAL REPORT AND SHAREHOLDER LETTER
FRANKLIN GOLD AND
PRECIOUS METALS FUND

INVESTMENT MANAGER

Franklin Advisers, Inc.

DISTRIBUTOR

Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES

1-800/632-2301

This report must be preceded or accompanied by the current Franklin Gold and
Precious Metals Fund prospectus, which contains more complete information
including charges, expenses and risks.

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

132 S2003 03/04

ITEM 2. CODE OF ETHICS.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 11(A), the Registrant is attaching as an exhibit a copy of
its code of ethics that applies to its principal executive officers financial
and accounting officer.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(a)(1) The registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert is Frank W.T. LaHaye, and he is
"independent" as defined under the relevant Securities and Exchange Commission
Rules and Releases.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. N/A

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. N/A

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no
changes to the procedures by which shareholders may recommend nominees to the
Registrant's Board of Trustees that would require disclosure herein.

ITEM 10. CONTROLS AND PROCEDURES.
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

ITEM 11. EXHIBITS.

(A) Code of Ethics for Principal Executive and Senior Financial Officers.

(B)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Diomedes Loo-Tam, Chief Financial Officer

(B)(2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Diomedes Loo-Tam, Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN GOLD AND PRECIOUS METALS FUND

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date March 31, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date March 31, 2004

By /s/Diomedes Loo-Tam
Chief Financial Officer
Date March 31, 2004