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 811-01700
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FRANKLIN GOLD AND PRECIOUS METALS FUND
--------------------------------------------
(Exact name of registrant as specified in charter)

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

CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
----------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: (650) 312-2000
-------------

Date of fiscal year end: 7/31
----

Date of reporting period: 1/31/09
-------

ITEM 1. REPORTS TO STOCKHOLDERS.

(GRAPHIC)

JANUARY 31, 2009

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

Log onto franklintempleton.com and click "My Profile"

SECTOR

FRANKLIN
GOLD AND PRECIOUS METALS FUND

(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)

FRANKLIN - Templeton - Mutual Series

Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE(R)

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
recognized leader in fixed income investing and
also brings 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 offices in over 25 countries,
Templeton offers investors a truly global
perspective.

MUTUAL SERIES. Founded in 1949, Mutual Series
is dedicated to a unique style of value
investing, searching aggressively for
opportunity among what it believes are
undervalued stocks, as well as arbitrage
situations and distressed securities.

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

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

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

(GRAPHIC)

Not part of the semiannual report

Contents

SHAREHOLDER LETTER ........................................................ 1
SEMIANNUAL REPORT
Franklin Gold and Precious Metals Fund .................................... 3
Performance Summary ....................................................... 8
Your Fund's Expenses ...................................................... 11
Financial Highlights and Statement of Investments ......................... 13
Financial Statements ...................................................... 20
Notes to Financial Statements ............................................. 24
Shareholder Information ................................................... 34

Shareholder Letter

Dear Shareholder:

The six-month period ended January 31, 2009, was an extraordinary and stressful
time for investors and those of us who have worked in financial markets for many
years. During this turbulent period, the U.S. recession deepened, the
unemployment rate surged and consumer spending fell. Most stocks suffered major
losses as investors worried about an uncertain future. With a new president,
Barack Obama, and a new administration, the country was eager to see how
effectively the government could address these problems. Although this
environment is bound to provoke great concern, we think it is important to put
short-term market developments in perspective. Keep in mind that as daunting as
current conditions may be, we have navigated through other periods of high
market volatility, such as the stock market's severe decline of 1987 and the
bursting of the technology bubble in 2000. We remain committed to our long-term
perspective and our disciplined investment philosophy. Therefore, we view recent
declines as potential opportunities to find bargains that we believe may be well
positioned to become eventual winners. Although conditions remain challenging,
our experience gives us ample reason to be optimistic about future market
stabilization and recovery.

In the enclosed semiannual report for Franklin Gold and Precious Metals Fund,
the portfolio manager discusses market conditions, investment management
decisions and Fund performance during the period under review. You will also
find other performance data and financial information. Please remember that all
securities markets fluctuate, as do mutual fund share prices.

If you would like more frequent updates, franklintempleton.com provides daily
prices, monthly performance figures, portfolio holdings and other information.
You can also access your account, buy and sell shares, read timely articles, and
find helpful financial planning tools. We hope you will take advantage of these
online services.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Not part of the semiannual report | 1

Although market conditions are constantly changing, we remain committed to our
disciplined strategy as we manage the Fund, keeping in mind the trust you have
placed in us. As always, we recommend investors consult their financial advisors
and review their portfolios to design a long-term strategy and portfolio
allocation that meet their individual needs, goals and risk tolerance. We firmly
believe that most people benefit from professional advice, and that advice is
invaluable as investors navigate current market conditions.

We thank you for investing with Franklin Templeton, welcome your questions and
comments, and look forward to serving your investment needs in the years ahead.

Sincerely,

/s/ Rupert H. Johnson, Jr.

Rupert H. Johnson, Jr.
President and Chief Executive Officer - Investment Management
Franklin Gold and Precious Metals Fund

THIS LETTER REFLECTS OUR ANALYSIS AND OPINIONS AS OF JANUARY 31, 2009. THE
INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY,
INDUSTRY, SECURITY OR FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED
RELIABLE.

2 | Not part of the semiannual report

Semiannual Report

Franklin Gold and Precious Metals Fund

YOUR FUND'S GOAL AND MAIN INVESTMENTS: Franklin Gold and Precious Metals Fund
seeks capital appreciation, with current income as its secondary goal, by
investing at least 80% of its net assets in securities of gold and precious
metals operation companies.

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. PLEASE VISIT franklintempleton.com OR CALL (800) 342-5236 FOR
MOST RECENT MONTH-END PERFORMANCE.

This semiannual report for Franklin Gold and Precious Metals Fund covers the
period ended January 31, 2009.

PERFORMANCE OVERVIEW

Franklin Gold and Precious Metals Fund - Class A had a cumulative total return
of -29.30% for the six months ended January 31, 2009. The Fund performed better
than the broad Standard & Poor's 500 Index's (S&P 500's) -33.95% total return,
but underperformed the sector-specific FTSE Gold Mines Index's -16.64% price
return during the same period.(1) You can find the Fund's long-term performance
data in the Performance Summary beginning on page 8.

ECONOMIC AND MARKET OVERVIEW

During the six-month period ended January 31, 2009, economic conditions
deteriorated. The Conference Board's Consumer Confidence Index fell to an
all-time low since it began in 1967 as the U.S. economy faltered and stock
markets declined. The government's abrupt conservatorship of Fannie Mae and
Freddie Mac and the failure of several blue chip banks and financial
institutions roiled equity markets. Despite government interventions and massive
emergency funding, the nation's economic troubles were exacerbated as
manufacturing activity weakened at its fastest pace in nearly 30 years and as
home prices continued to fall. Jobless claims mounted and the

(1.) Source: (C) 2009 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. The 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 FTSE 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. The indexes are unmanaged. 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 NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 17.

Semiannual Report | 3

GEOGRAPHIC BREAKDOWN
Based on Total Net Assets as of 1/31/09

(BAR CHART)

Canada 43.3%
South Africa 20.2%
Australia 12.1%
U.K. 10.0%
U.S. 5.8%
Peru 4.1%
Papua New Guinea 3.2%
Short-Term Investments & Other Net Assets 1.3%

unemployment rate rose to 7.6% by period-end.(2) Economic growth, as measured by
gross domestic product (GDP), fell in the third and fourth quarters of 2008 at
annualized rates of 0.5% and an estimated 6.2%, reflecting a broad-based
contraction in consumer spending, falling corporate profits and slowing export
growth.

Oil prices stood at $124 per barrel at the beginning of the period, but
retreated dramatically to $42 by period-end. Many other commodities such as
agricultural products and precious and base metals followed similar trends.
Partially as a result of the steep price corrections, inflation declined
significantly during the period, and January's inflation rate was an annualized
0.0%.(2) Core inflation, which excludes food and energy costs, rose at a 1.7%
annual rate, which was within the Federal Reserve Board's (Fed's) informal
target range of 1.5%-2.0%.(2)

A slowing economy and decelerating inflation prompted policymakers to further
lower interest rates and enact stimulus plans. During the six months under
review, the Fed lowered the federal funds target rate to a range of 0% to 0.25%
from 2.00% at the start of the reporting period. The Fed and U.S. Treasury
Department also introduced new programs such as the Primary Dealer Credit
Facility and the Troubled Asset Relief Program, which were intended to enhance
market liquidity.

Market volatility intensified during the reporting period as stocks fluctuated
wildly and Treasury prices soared. This period was among the worst in history
for U.S. stock market performance. For the six months under review, the blue
chip stocks of the Dow Jones Industrial Average had a total return of -28.52%,
the broader S&P 500 a -33.95% total return, and the technology-heavy NASDAQ
Composite Index a -36.21% total return.(3) All sectors lost value, and the
financials, materials and industrials sectors had the largest declines.

Precious metals fell during the first half of the period under review and then
rallied toward period-end, offsetting some of the earlier losses. Gold ended the

(2.) Source: Bureau of Labor Statistics.

(3.) Source: (C) 2009 Morningstar. All Rights Reserved. The Dow Jones Industrial
Average is price weighted based on the average market price of 30 blue chip
stocks of companies that are generally industry leaders. See footnote 1 for
a description of the S&P 500. The NASDAQ Composite Index measures all
NASDAQ domestic and international based common type stocks listed on The
NASDAQ Stock Market. The index is market value weighted and includes more
than 3,000 companies.

4 | Semiannual Report

PRECIOUS METALS PRICES (8/1/08-1/31/09)*

(PERFORMANCE GRAPH)

(PLOT POINTS TO COME)

* Amounts shown are based on spot prices quoted in U.S. dollars per troy
ounce. For illustrative purposes only; not representative of the Fund's
portfolio composition or performance.

PORTFOLIO BREAKDOWN
Based on Total Net Assets as of 1/31/09

(BAR CHART)

period with a positive return while platinum, palladium and silver had negative
returns. Gold was up 2% for the six months ended January 31, 2009, as it began
the period at $914 per ounce, moved to a low of $712 per ounce in November 2008,
and then rose to $928 per ounce by the end of January 2009. Platinum started at
$1,761 per ounce, traded lower until October 27 when prices rose, but still
closed down 44% at $988 per ounce. Palladium followed a similar path to platinum
with prices falling from $382 per ounce at the beginning of the period to a low
of $164 in December 2008, and ending the period at $194, a 49% decrease. Silver
started the period at $18 per ounce, fell to $9 on November 20, and ended the
period at $13 with a 28% loss.

INVESTMENT STRATEGY

We believe that investing in gold and other precious metals offers an excellent
opportunity for diversification in an attractive asset class over the long term.
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.

Long Life Gold Mines 64.8%
Medium Life Gold Mines 16.5%
Platinum & Palladium 8.4%
Gold Exploration & Development 3.5%
Silver Mines 3.3%
Gold & Diversified Resources 2.2%
Short-Term Investments & Other Net Assets 1.3%

Semiannual Report | 5

TOP 10 HOLDINGS

1/31/09

COMPANY % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
- ------------------------ ----------

Goldcorp Inc., ord. & warrants 8.2%
LONG LIFE GOLD MINES, CANADA
Newcrest Mining Ltd. 8.2%
LONG LIFE GOLD MINES, AUSTRALIA
Barrick Gold Corp. 8.0%
LONG LIFE GOLD MINES, CANADA
Randgold Resources Ltd., ADR 7.3%
LONG LIFE GOLD MINES, U.K.
AngloGold Ashanti Ltd., ord. & ADR 7.2%
LONG LIFE GOLD MINES, SOUTH AFRICA
Agnico-Eagle Mines Ltd. 5.1%
LONG LIFE GOLD MINES, CANADA
Kinross Gold Corp. 4.8%
MEDIUM LIFE GOLD MINES, CANADA
Newmont Mining Corp. 4.6%
LONG LIFE GOLD MINES, U.S.
Yamana Gold Inc., ord. & 144A 4.4%
MEDIUM LIFE GOLD MINES, CANADA
Impala Platinum Holdings Ltd., ord. & ADR 4.3%
PLATINUM AND PALLADIUM, SOUTH AFRICA

MANAGER'S DISCUSSION

Although gold bullion recovered during the six months under review, gold
equities regained only a portion of the losses as they were not able to avoid
the overall drag of the stock market. The platinum price collapsed as catalytic
converter demand plummeted with the automotive market's massive deceleration.
Merger activity slowed in the period as general market uncertainty made it
difficult for firms to agree on terms and to arrange financing. Two exceptions
were the proposed mergers of Imagold with Orezone and Central Sun Mining with
B2Gold. As gold equities began to recover, several companies sought to take
advantage of investor interest in the sector in January and issued additional
shares to shore up their balance sheets. The drop in prices of oil, natural gas,
steel and other consumables helped reverse the trend of rising costs the
industry has been facing in the past several years. Mining is a very
energy-intensive business as many remote mines run on diesel generators and
operate mining trucks that consume large amounts of diesel fuel. The downturn in
the base metal sector also helped ease some of the wage pressure and shortage of
qualified people that had been plaguing the gold industry. The combination of a
strong gold price, improving balance sheets, and declining input costs helped to
create a more positive outlook for the industry heading into January, in our
view.

In this environment, the Fund had several detractors from performance during the
period. Share prices declined for South African platinum producers Impala
Platinum Holdings and Anglo Platinum, and Australian gold and copper mining
company Newcrest Mining. Anglo Platinum is the world's largest primary producer
of platinum. Other major detractors included Peru's Compania de Minas
Buenaventura, South Africa's Mvelaphanda Resources and Australia-based PanAust
and OZ Minerals. The merger of Oxiana with Zinifex created OZ Minerals, a
diversified mining company with a focus on zinc, copper and gold.

It is important to recognize the effect of currency movements on the Fund's
performance. In general, if the value of the U.S. dollar increases compared with
a foreign currency, an investment traded in that foreign currency will decrease
in value because it will be worth fewer U.S. dollars. This can have a negative
effect on Fund performance. Conversely, when the U.S. dollar weakens in relation
to a foreign currency, an investment traded in that foreign currency will
increase in value, which can contribute to Fund performance. For the six months
ended January 31, 2009, the U.S. dollar rose in value relative to most non-U.S.
currencies. As a result, the Fund's performance was negatively affected by the
Fund's predominant investment in securities with

6 | Semiannual Report

non-U.S. currency exposure. In many cases, currency movements during the six
months under review were extreme. For example, the Canadian dollar dropped 20%
versus the U.S. dollar, the South African rand fell 39% and the Australian
dollar plummeted 47%.

On a more positive note, significant contributors to Fund performance during the
reporting period were South Africa-based gold miner AngloGold Ashanti; Randgold
Resources, which owns mining and exploration operations in Mali and five other
African nations; and Canada-based Barrick Gold, the world's leading gold
producer. Other notable contributors included Canada's Kinross Gold and Eldorado
Gold, and South Africa's Gold Fields and Harmony Gold Mining.

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

(PHOTO OF STEPHEN M. LAND)

/s/ Stephen M. Land

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

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF JANUARY 31, 2009, 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 INVESTMENT MANAGER 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 1/31/09

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 that a
shareholder would pay on Fund dividends, capital gain distributions, if any, or
any realized gains on the sale of Fund shares. Total return reflects
reinvestment of the Fund's dividends and capital gain distributions, if any, and
any unrealized gains or losses.

PRICE AND DISTRIBUTION INFORMATION

CLASS A (SYMBOL: FKRCX) CHANGE 1/31/09 7/31/08
- ----------------------- ------- ------- -------

Net Asset Value (NAV) -$10.43 $24.58 $35.01
DISTRIBUTIONS (8/1/08-1/31/09)
Long-Term Capital Gain $0.1215

CLASS B (SYMBOL: FAGPX) CHANGE 1/31/09 7/31/08
- ----------------------- ------- ------- -------

Net Asset Value (NAV) -$10.16 $23.57 $33.73
DISTRIBUTIONS (8/1/08-1/31/09)
Long-Term Capital Gain $0.1215

CLASS C (SYMBOL: FRGOX) CHANGE 1/31/09 7/31/08
- ----------------------- ------- ------- -------

Net Asset Value (NAV) -$10.24 $23.79 $34.03
DISTRIBUTIONS (8/1/08-1/31/09)
Long-Term Capital Gain $0.1215

ADVISOR CLASS (SYMBOL: FGADX) CHANGE 1/31/09 7/31/08
- ----------------------------- ------- ------- -------

Net Asset Value (NAV) -$10.72 $25.39 $36.11
DISTRIBUTIONS (8/1/08-1/31/09)
Long-Term Capital Gain $0.1215

8 | Semiannual Report

Performance Summary (CONTINUED)

PERFORMANCE

CUMULATIVE TOTAL RETURN EXCLUDES SALES CHARGES. AVERAGE ANNUAL TOTAL RETURNS AND
VALUE OF $10,000 INVESTMENT INCLUDE MAXIMUM SALES CHARGES. CLASS A: 5.75%
MAXIMUM INITIAL SALES CHARGE; CLASS B: CONTINGENT DEFERRED SALES CHARGE (CDSC)
DECLINING FROM 4% TO 1% OVER SIX YEARS, AND ELIMINATED THEREAFTER; CLASS C: 1%
CDSC IN FIRST YEAR ONLY; ADVISOR CLASS: NO SALES CHARGES.

CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ------- --------

Cumulative Total Return(1) -29.30% -37.42% +65.66% +300.81%
Average Annual Total Return(2) -33.38% -41.01% +9.32% +14.21%
Value of $10,000 Investment(3) $ 6,662 $ 5,899 $15,613 $ 37,775
Avg. Ann. Total Return (12/31/08)(4) -34.86% +7.44% +14.37%
Total Annual Operating Expenses(5) 0.91%

CLASS B 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ------- --------

Cumulative Total Return(1) -29.62% -37.92% +59.45% +277.84%
Average Annual Total Return(2) -32.41% -40.38% +9.50% +14.22%
Value of $10,000 Investment(3) $ 6,759 $ 5,962 $15,745 $ 37,784
Avg. Ann. Total Return (12/31/08)(4) -34.16% +7.60% +14.36%
Total Annual Operating Expenses(5) 1.66%

CLASS C 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------- ------- ------- ------- --------

Cumulative Total Return(1) -29.59% -37.89% +59.62% +272.99%
Average Annual Total Return(2) -30.29% -38.51% +9.80% +14.07%
Value of $10,000 Investment(3) $ 6,971 $ 6,149 $15,962 $ 37,299
Avg. Ann. Total Return (12/31/08)(4) -32.09% +7.92% +14.22%
Total Annual Operating Expenses(5) 1.66%

ADVISOR CLASS 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- ------------- ------- ------- ------- --------

Cumulative Total Return(1) -29.23% -37.26% +67.65% +311.33%
Average Annual Total Return(2) -29.23% -37.26% +10.89% +15.19%
Value of $10,000 Investment(3) $ 7,077 $ 6,274 $16,765 $ 41,133
Avg. Ann. Total Return (12/31/08)(4) -30.71% +8.99% +15.34%
Total Annual Operating Expenses(5) 0.66%

PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE
A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM
FIGURES SHOWN. FOR MOST RECENT MONTH-END PERFORMANCE, SEE "FUNDS AND
PERFORMANCE" AT franklintempleton.com OR CALL (800) 342-5236.

Semiannual Report | 9

Performance Summary (CONTINUED)

ENDNOTES

INVESTING IN A NONDIVERSIFIED FUND THAT CONCENTRATES 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. IN ADDITION, THE FUND
IS SUBJECT TO THE RISKS OF CURRENCY FLUCTUATION AND POLITICAL UNCERTAINTY
ASSOCIATED WITH FOREIGN INVESTING. INVESTMENTS IN DEVELOPING MARKETS INVOLVE
HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED
WITH THEIR RELATIVELY SMALL SIZE AND LESSER LIQUIDITY. THE FUND'S PROSPECTUS
ALSO INCLUDES A DESCRIPTION OF THE MAIN INVESTMENT RISKS.

CLASS B: These shares have higher annual fees and expenses than Class A
shares.

CLASS C: Prior to 1/1/04, these shares were offered with an initial sales
charge; thus actual total returns would have differed. These
shares have higher annual fees and expenses than Class A shares.

ADVISOR CLASS: Shares are available to certain eligible investors as described
in the prospectus.

(1.) Cumulative total return represents the change in value of an investment
over the periods indicated.

(2.) Average annual total return represents the average annual change in value
of an investment over the periods indicated. 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.

(4.) In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

(5.) Figures are as stated in the Fund's prospectus current as of the date of
this report.

10 | Semiannual Report

Your Fund's Expenses

As a Fund shareholder, you can incur two types of costs:

- - Transaction costs, including sales charges (loads) on Fund purchases; and

- - Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs,
sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help
you understand these costs and compare them with those of other mutual funds.
The table assumes a $1,000 investment held for the six months indicated.

ACTUAL FUND EXPENSES

The first line (Actual) for each share class listed in the table provides actual
account values and expenses. The "Ending Account Value" is derived from the
Fund's actual return, which includes the effect of Fund expenses.

You can estimate the expenses you paid during the period by following these
steps. OF COURSE, YOUR ACCOUNT VALUE AND EXPENSES WILL DIFFER FROM THOSE IN THIS
ILLUSTRATION:

1. Divide your account value by $1,000.

IF AN ACCOUNT HAD AN $8,600 VALUE, THEN $8,600 / $1,000 = 8.6.

2. Multiply the result by the number under the heading "Expenses Paid During
Period."

IF EXPENSES PAID DURING PERIOD WERE $7.50, THEN 8.6 X $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

HYPOTHETICAL EXAMPLE FOR COMPARISON WITH OTHER FUNDS

Information in the second line (Hypothetical) for each class in the table can
help you compare ongoing costs of investing in the Fund with those of other
mutual funds. This information may not be used to estimate the actual ending
account balance or expenses you paid during the period. The hypothetical "Ending
Account Value" is based on the actual expense ratio for each class and an
assumed 5% annual rate of return before expenses, which does not represent the
Fund's actual return. The figure under the heading "Expenses Paid During Period"
shows the hypothetical expenses your account would have incurred under this
scenario. You can compare this figure with the 5% hypothetical examples that
appear in shareholder reports of other funds.

Semiannual Report | 11

Your Fund's Expenses (CONTINUED)

PLEASE NOTE THAT EXPENSES SHOWN IN THE TABLE ARE MEANT TO HIGHLIGHT ONGOING
COSTS AND DO NOT REFLECT ANY TRANSACTION COSTS, SUCH AS SALES CHARGES.
Therefore, the second line for each class is useful in comparing ongoing costs
only, and will not help you compare total costs of owning different funds. In
addition, if transaction costs were included, your total costs would have been
higher. Please refer to the Fund prospectus for additional information on
operating expenses.

BEGINNING ACCOUNT ENDING ACCOUNT EXPENSES PAID DURING
VALUE 8/1/08 VALUE 1/31/09 PERIOD* 8/1/08-1/31/09
----------------- -------------- ----------------------

CLASS A
Actual $1,000 $ 707.00 $4.39
Hypothetical (5% return before expenses) $1,000 $1,020.06 $5.19
CLASS B
Actual $1,000 $ 703.80 $7.56
Hypothetical (5% return before expenses) $1,000 $1,016.33 $8.94
CLASS C
Actual $1,000 $ 704.10 $7.56
Hypothetical (5% return before expenses) $1,000 $1,016.33 $8.94
ADVISOR CLASS
Actual $1,000 $ 707.70 $3.31
Hypothetical (5% return before expenses) $1,000 $1,021.32 $3.92

* Expenses are calculated using the most recent six-month expense ratio,
annualized for each class (A: 1.02%; B: 1.76%; C: 1.76%; and Advisor:
0.77%), multiplied by the average account value over the period, multiplied
by 184/365 to reflect the one-half year period.

12 | Semiannual Report

Franklin Gold and Precious Metals Fund

FINANCIAL HIGHLIGHTS

SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2009 --------------------------------------------------------
CLASS A (UNAUDITED) 2008 2007 2006 2005 2004
- ------- ---------------- ---------- ---------- -------- -------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ........... $ 35.01 $ 33.73 $ 30.67 $ 17.81 $ 15.94 $ 13.74
-------- ---------- ---------- -------- -------- --------
Income from investment operations(a):
Net investment income(b) .................... 0.16 0.03 0.11 0.15 0.04 0.05
Net realized and unrealized gains (losses) .. (10.47) 5.09 4.71 12.87 1.84 2.25
-------- ---------- ---------- -------- -------- --------
Total from investment operations ............... (10.31) 5.12 4.82 13.02 1.88 2.30
-------- ---------- ---------- -------- -------- --------
Less distributions from:
Net investment income ....................... -- (1.97) (0.76) (0.16) (0.01) (0.10)
Net realized gains .......................... (0.12) (1.87) (1.00) -- -- --
-------- ---------- ---------- -------- -------- --------
Total distributions ............................ (0.12) (3.84) (1.76) (0.16) (0.01) (0.10)
-------- ---------- ---------- -------- -------- --------
Redemption fees(c, d) .......................... -- -- -- -- -- --
-------- ---------- ---------- -------- -------- --------
Net asset value, end of period ................. $ 24.58 $ 35.01 $ 33.73 $ 30.67 $ 17.81 $ 15.94
======== ========== ========== ======== ======== ========
Total return(e) ................................ (29.30)% 14.76% 15.94% 73.36% 11.78% 16.68%
RATIOS TO AVERAGE NET ASSETS(f)
Expenses(g) .................................... 1.02% 0.89% 0.93% 0.92% 0.96% 0.96%
Net investment income .......................... 1.36% 0.08% 0.33% 0.57% 0.21% 0.26%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $857,184 $1,310,889 $1,011,344 $885,176 $439,628 $394,292
Portfolio turnover rate ........................ 5.94% 4.48% 7.20% 10.96% 11.33% 8.11%

(a) The amount shown for a share outstanding throughout the period may not
correlate with the Statement of Operations for the period due to the timing
of sales and repurchases of the Fund shares in relation to income earned
and/or fluctuating market value of the investments of the Fund.

(b) Based on average daily shares outstanding.

(d) Effective September 1, 2008, the redemption fee was eliminated.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(f) Ratios are annualized for periods less than one year.

(g) Benefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 13

Franklin Gold and Precious Metals Fund

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2009 --------------------------------------------------
CLASS B (UNAUDITED) 2008 2007 2006 2005 2004
- ------- ---------------- ------- ------- ------- ------- -------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ........... $ 33.73 $ 32.60 $ 29.62 $ 17.24 $ 15.54 $ 13.46
------- ------- ------- ------- ------- -------
Income from investment operations(a):
Net investment income (loss)(b) ............. 0.07 (0.23) (0.12) (0.04) (0.09) (0.08)
Net realized and unrealized gains (losses) .. (10.11) 4.92 4.54 12.44 1.79 2.21
------- ------- ------- ------- ------- -------
Total from investment operations ............... (10.04) 4.69 4.42 12.40 1.70 2.13
------- ------- ------- ------- ------- -------
Less distributions from:
Net investment income ....................... -- (1.69) (0.44) (0.02) -- (0.05)
Net realized gains .......................... (0.12) (1.87) (1.00) -- -- --
------- ------- ------- ------- ------- -------
Total distributions ............................ (0.12) (3.56) (1.44) (0.02) -- (0.05)
------- ------- ------- ------- ------- -------
Redemption fees(c, d) .......................... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Net asset value, end of period ................. $ 23.57 $ 33.73 $ 32.60 $ 29.62 $ 17.24 $ 15.54
======= ======= ======= ======= ======= =======
Total return(e) ................................ (29.62)% 13.91% 15.12% 71.95% 10.94% 15.81%
RATIOS TO AVERAGE NET ASSETS(f)
Expenses(g) .................................... 1.76% 1.64% 1.68% 1.67% 1.70% 1.71%
Net investment income (loss) ................... 0.62% (0.67)% (0.41)% (0.19)% (0.53)% (0.49)%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $40,313 $60,872 $62,386 $60,423 $41,270 $37,738
Portfolio turnover rate ........................ 5.94% 4.48% 7.20% 10.96% 11.33% 8.11%

(b) Based on average daily shares outstanding.

(d) Effective September 1, 2008, the redemption fee was eliminated.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(f) Ratios are annualized for periods less than one year.

(g) Benefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

14 | Semiannual Report

Franklin Gold and Precious Metals Fund

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2009 --------------------------------------------------------
CLASS C (UNAUDITED) 2008 2007 2006 2005 2004
- ------- ---------------- -------- -------- -------- -------- --------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ........... $ 34.03 $ 32.90 $ 29.90 $ 17.40 $ 15.69 $ 13.59
-------- -------- -------- -------- -------- --------
Income from investment operations(a):
Net investment income (loss)(b) ............. 0.06 (0.25) (0.13) (0.05) (0.09) (0.09)
Net realized and unrealized gains (losses) .. (10.18) 4.98 4.60 12.58 1.80 2.23
-------- -------- -------- -------- -------- --------
Total from investment operations ............... (10.12) 4.73 4.47 12.53 1.71 2.14
-------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ....................... -- (1.73) (0.47) (0.03) -- (0.04)
Net realized gains .......................... (0.12) (1.87) (1.00) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions ............................ (0.12) (3.60) (1.47) (0.03) -- (0.04)
-------- -------- -------- -------- -------- --------
Redemption fees(c, d) .......................... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period ................. $ 23.79 $ 34.03 $ 32.90 $ 29.90 $ 17.40 $ 15.69
======== ======== ======== ======== ======== ========
Total return(e) ................................ (29.59)% 13.89% 15.10% 72.04% 10.96% 15.77%
RATIOS TO AVERAGE NET ASSETS(f)
Expenses(g) .................................... 1.76% 1.64% 1.68% 1.67% 1.71% 1.71%
Net investment income (loss) ................... 0.62% (0.67)% (0.41)% (0.19)% (0.54)% (0.49)%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $223,444 $319,641 $240,424 $217,371 $114,315 $101,962
Portfolio turnover rate ........................ 5.94% 4.48% 7.20% 10.96% 11.33% 8.11%

(b) Based on average daily shares outstanding.

(d) Effective September 1, 2008, the redemption fee was eliminated.

(e) Total return does not reflect sales commissions or contingent deferred
sales charges, if applicable, and is not annualized for periods less than
one year.

(f) Ratios are annualized for periods less than one year.

(g) Benefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 15

Franklin Gold and Precious Metals Fund

FINANCIAL HIGHLIGHTS (CONTINUED)

SIX MONTHS ENDED YEAR ENDED JULY 31,
JANUARY 31, 2009 ------------------------------------------------
ADVISOR CLASS (UNAUDITED) 2008 2007 2006 2005 2004
- ------------- ---------------- -------- ------- ------- ------- -------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ........... $ 36.11 $ 34.68 $ 31.50 $ 18.28 $ 16.36 $ 14.08
-------- -------- ------- ------- ------- -------
Income from investment operations(a):
Net investment income(b) .................... 0.17 0.11 0.19 0.22 0.08 0.08
Net realized and unrealized gains (losses) .. (10.77) 5.25 4.84 13.20 1.89 2.33
-------- -------- ------- ------- ------- -------
Total from investment operations ............... (10.60) 5.36 5.03 13.42 1.97 2.41
-------- -------- ------- ------- ------- -------
Less distributions from:
Net investment income ....................... -- (2.06) (0.85) (0.20) (0.05) (0.13)
Net realized gains .......................... (0.12) (1.87) (1.00) -- -- --
-------- -------- ------- ------- ------- -------
Total distributions ............................ (0.12) (3.93) (1.85) (0.20) (0.05) (0.13)
-------- -------- ------- ------- ------- -------
Redemption fees(c,d) ........................... -- -- -- -- -- --
-------- -------- ------- ------- ------- -------
Net asset value, end of period ................. $ 25.39 $ 36.11 $ 34.68 $ 31.50 $ 18.28 $ 16.36
======== ======== ======= ======= ======= =======
Total return(e) ................................ (29.23)% 15.05% 16.25% 73.68% 12.09% 16.91%
RATIOS TO AVERAGE NET ASSETS(f)
Expenses(g) .................................... 0.77% 0.64% 0.68% 0.67% 0.71% 0.71%
Net investment income .......................... 1.61% 0.33% 0.58% 0.82% 0.46% 0.51%
SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $103,026 $115,322 $65,120 $60,213 $34,519 $35,351
Portfolio turnover rate ........................ 5.94% 4.48% 7.20% 10.96% 11.33% 8.11%

(b) Based on average daily shares outstanding.

(d) Effective September 1, 2008, the redemption fee was eliminated.

(e) Total return is not annualized for periods less than one year.

(f) Ratios are annualized for periods less than one year.

(g) Benefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

16 | Semiannual Report

Franklin Gold and Precious Metals Fund

STATEMENT OF INVESTMENTS, JANUARY 31, 2009 (UNAUDITED)

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

COMMON STOCKS 98.7%
GOLD AND DIVERSIFIED RESOURCES 2.2%
(a) First Uranium Corp. ................................................ Canada 800,600 $ 2,935,109
(a, b) First Uranium Corp., 144A .......................................... Canada 544,800 1,997,312
(b) Franco-Nevada Corp., 144A .......................................... Canada 420,000 8,708,298
(c) OZ Minerals Ltd. ................................................... Australia 8,882,655 2,328,349
(a) PanAust Ltd. ....................................................... Australia 30,600,000 2,625,044
(a, b) PanAust Ltd., 144A ................................................. Australia 11,600,000 995,115
Royal Gold Inc. .................................................... United States 150,000 7,212,000
--------------
26,801,227
--------------
GOLD EXPLORATION AND DEVELOPMENT 3.5%
(a) AXMIN Inc. ......................................................... Canada 500,000 38,698
(a, b) AXMIN Inc., 144A ................................................... Canada 2,000,000 154,792
(a) Banro Corp. ........................................................ Canada 350,000 564,585
(a) Banro Corp. ........................................................ Canada 1,200,000 1,980,000
(a) Banro Corp., wts., 2/01/49 ......................................... Canada 600,000 306,000
(a) Bendigo Mining Ltd. ................................................ Australia 18,648,795 1,955,312
(a) Centamin Egypt Ltd. ................................................ Australia 10,500,000 6,244,654
(a, b, d) Centamin Egypt Ltd., 144A .......................................... Australia 17,000,000 10,110,392
(a) Gabriel Resources Ltd. ............................................. Canada 1,030,000 2,383,152
(a, b) Gabriel Resources Ltd., 144A ....................................... Canada 1,300,000 3,007,862
(a) International Minerals Corp. ....................................... Canada 700,000 1,636,727
(a) Ivanhoe Mines Ltd. ................................................. Canada 490,000 1,349,301
(a, b) Ivanhoe Mines Ltd., 144A ........................................... Canada 918,600 2,529,527
(a) Mineral Deposits Ltd. .............................................. Australia 9,196,185 3,798,415
(a) Nautilus Minerals Inc. ............................................. Canada 1,660,000 1,487,637
(a, b) Nautilus Minerals Inc., 144A ....................................... Canada 1,278,000 1,145,301
(a, b) Nautilus Minerals Inc., wts., 144A, 2/20/09 ........................ Canada 639,000 --
(a) Nevsun Resources Ltd. .............................................. Canada 877,000 943,126
(a) Orezone Resources Inc. ............................................. Canada 4,500,000 2,565,000
(a, b) Orsu Metals Corp., 144A ............................................ Canada 10,600,000 777,221
(a, b) Orsu Metals Corp., wts., 144A, 4/11/10 ............................. Canada 5,300,000 86,358
--------------
43,064,060
--------------
LONG LIFE GOLD MINES 64.8%
Agnico-Eagle Mines Ltd. ............................................ Canada 1,170,000 62,056,800
(a) Alamos Gold Inc. ................................................... Canada 1,596,400 10,248,590
(a, b) Alamos Gold Inc., 144A ............................................. Canada 400,000 2,567,925
AngloGold Ashanti Ltd. ............................................. South Africa 78,911 2,213,452
AngloGold Ashanti Ltd., ADR ........................................ South Africa 2,984,723 85,631,703
Barrick Gold Corp. ................................................. Canada 2,606,283 97,709,550
(a) Centerra Gold Inc. ................................................. Canada 1,471,100 6,256,175
(a, b) Centerra Gold Inc., 144A ........................................... Canada 1,384,800 5,889,165
Compania de Minas Buenaventura SA .................................. Peru 201,186 3,798,573
Compania de Minas Buenaventura SA, ADR ............................. Peru 2,477,972 46,684,992
(a) Gammon Gold Inc. ................................................... Canada 2,814,500 18,573,017
Gold Fields Ltd. ................................................... South Africa 697,191 7,405,050
Gold Fields Ltd., ADR .............................................. South Africa 2,704,528 28,424,589
Goldcorp Inc. ...................................................... Canada 3,410,490 100,873,150
(a) Goldcorp Inc., wts., 6/09/11 ....................................... Canada 9,125 70,773

Semiannual Report | 17

Franklin Gold and Precious Metals Fund

STATEMENT OF INVESTMENTS, JANUARY 31, 2009 (UNAUDITED) (CONTINUED)

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

COMMON STOCKS (CONTINUED)
LONG LIFE GOLD MINES (CONTINUED)
(a) Harmony Gold Mining Co. Ltd. ....................................... South Africa 1,443,000 $ 17,031,783
(a) Harmony Gold Mining Co. Ltd., ADR .................................. South Africa 1,225,000 14,455,000
(a) Lihir Gold Ltd. .................................................... Papua New Guinea 19,447,142 38,679,559
Newcrest Mining Ltd. ............................................... Australia 5,085,928 100,187,444
(d) Newmont Mining Corp. ............................................... United States 1,400,614 55,716,425
Randgold Resources Ltd., ADR ....................................... United Kingdom 2,002,600 89,035,596
--------------
793,509,311
--------------
MEDIUM LIFE GOLD MINES 16.5%
(a) Aurizon Mines Ltd. ................................................. Canada 200,000 703,898
(a, b) Aurizon Mines Ltd., 144A ........................................... Canada 1,800,000 6,335,085
(a, e) Central Sun Mining Inc. ............................................ Canada 3,105,100 2,150,259
(a) Eldorado Gold Corp. ................................................ Canada 3,445,000 26,943,664
(a) Golden Star Resources Ltd. ......................................... Canada 700,000 1,022,000
(a) Golden Star Resources Ltd. ......................................... Canada 2,450,000 3,732,535
IAMGOLD Corp. ...................................................... Canada 1,472,000 10,073,567
(a, b) Jinshan Gold Mines Inc., 144A ...................................... Canada 5,595,000 2,598,191
(a) Kingsgate Consolidated Ltd. ........................................ Australia 2,355,148 5,627,136
Kinross Gold Corp. ................................................. Canada 3,328,012 58,917,024
(a) New Gold Inc. ...................................................... Canada 450,000 953,196
(a, b) New Gold Inc., 144A ................................................ Canada 890,098 1,885,417
(a) SEMAFO Inc. ........................................................ Canada 4,725,000 7,313,944
(a, b) SEMAFO Inc., 144A .................................................. Canada 3,000,000 4,643,774
(a) Sino Gold Mining Ltd. .............................................. Australia 4,000,000 12,607,328
(a, b) Sino Gold Mining Ltd., 144A ........................................ Australia 413,333 1,302,756
Yamana Gold Inc. ................................................... Canada 4,428,720 35,801,341
(b) Yamana Gold Inc., 144A ............................................. Canada 2,300,000 18,625,606
--------------
201,236,721
--------------
PLATINUM AND PALLADIUM 8.4%
Anglo Platinum Ltd. ................................................ South Africa 124,000 5,164,135
Anglo Platinum Ltd., ADR ........................................... South Africa 571,138 23,393,813
Aquarius Platinum Ltd. ............................................. South Africa 1,000,000 2,289,662
(a) Eastern Platinum Ltd. .............................................. Canada 27,313,600 8,122,094
Impala Platinum Holdings Ltd. ...................................... South Africa 3,025,000 35,250,661
Impala Platinum Holdings Ltd., ADR ................................. South Africa 1,542,400 17,830,144
Lonmin PLC ......................................................... United Kingdom 62,500 786,051
(a) Mvelaphanda Resources Ltd. ......................................... South Africa 2,650,000 5,167,565
(a) Platinum Group Metals Ltd. ......................................... Canada 3,000,000 4,692,656
--------------
102,696,781
--------------
SILVER MINES 3.3%
Fresnillo PLC ...................................................... United Kingdom 1,100,000 5,659,929
(b) Fresnillo PLC, 144A ................................................ United Kingdom 4,036,100 20,767,310
(a) Hecla Mining Co. ................................................... United States 3,200,000 8,480,000
Hochschild Mining PLC .............................................. United Kingdom 2,600,000 5,622,917
--------------
40,530,156
--------------
TOTAL COMMON STOCKS (COST $914,163,840) ............................ 1,207,838,256
--------------

18 | Semiannual Report

Franklin Gold and Precious Metals Fund

STATEMENT OF INVESTMENTS, JANUARY 31, 2009 (UNAUDITED) (CONTINUED)

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

SHORT TERM INVESTMENTS (COST $22,877,008) 1.9%
MONEY MARKET FUNDS 1.9%
(f) Franklin Institutional Fiduciary Trust Money Market Portfolio,
0.39% ........................................................... United States 22,877,008 $ 22,877,008
--------------
TOTAL INVESTMENTS (COST $937,040,848) 100.6% ....................... 1,230,715,264
OTHER ASSETS, LESS LIABILITIES (0.6)% .............................. (6,748,317)
--------------
NET ASSETS 100.0% .................................................. $1,223,966,947
==============

See Abbreviations on page 32.

(a) Non-income producing for the twelve months ended January 31, 2009.

(b) Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and may be sold in transactions exempt from registration only to
qualified institutional buyers or in a public offering registered under the
Securities Act of 1933. These securities have been deemed liquid under
guidelines approved by the Fund's Board of Trustees. At January 31, 2009,
the aggregate value of these securities was $94,127,407, representing 7.69%
of net assets.

(c) Security has been deemed illiquid because it may not be able to be sold
within seven days. At January 31, 2009, the value of this security was
$2,328,349, representing 0.19% of net assets.

(d) A portion or all of the security purchased on a delayed delivery basis. See
Note 1(c).

(e) See Note 9 regarding holdings of 5% voting securities.

(f) See Note 7 regarding investments in the Franklin Institutional Fiduciary
Trust Money Market Portfolio. The rate shown is the annualized seven-day
yield at period end.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 19

Franklin Gold and Precious Metals Fund

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
January 31, 2009 (unaudited)

Assets:
Investments in securities:
Cost - Unaffiliated issuers ............................ $ 912,499,709
Cost - Non-controlled affiliated issuers ............... 1,664,131
Cost - Sweep Money Fund (Note 7) ....................... 22,877,008
--------------
Total cost of investments .............................. $ 937,040,848
==============
Value - Unaffiliated issuers ........................... $1,205,687,997
Value - Non-controlled affiliated issuers .............. 2,150,259
Value - Sweep Money Fund (Note 7) ...................... 22,877,008
--------------
Total value of investments ............................. 1,230,715,264
Foreign currency, at value (cost $1,297,609) .............. 1,347,749
Receivables:
Investment securities sold ............................. 14,593,386
Capital shares sold .................................... 5,517,330
Dividends .............................................. 35,612
--------------
Total assets ........................................ 1,252,209,341
--------------
Liabilities:
Payables:
Investment securities purchased ........................ 24,304,642
Capital shares redeemed ................................ 2,577,296
Affiliates ............................................. 929,290
Accrued expenses and other liabilities .................... 431,166
--------------
Total liabilities ................................... 28,242,394
--------------
Net assets, at value ............................. $1,223,966,947
==============
Net assets consist of:
Paid-in capital ........................................... $1,028,448,831
Distributions in excess of net investment income .......... (88,471,882)
Net unrealized appreciation (depreciation) ................ 293,709,346
Accumulated net realized gain (loss) ...................... (9,719,348)
--------------
Net assets, at value ............................. $1,223,966,947
==============

The accompanying notes are an integral part of these financial statements.

20 | Semiannual Report

Franklin Gold and Precious Metals Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
January 31, 2009 (unaudited)

CLASS A:
Net assets, at value .................................................... $857,183,712
============
Shares outstanding ...................................................... 34,879,038
============
Net asset value per share(a) ............................................ $ 24.58
============
Maximum offering price per share (net asset value per share / 94.25%) ... $ 26.08
============
CLASS B:
Net assets, at value .................................................... $ 40,313,485
============
Shares outstanding ...................................................... 1,710,239
============
Net asset value and maximum offering price per share(a) ................. $ 23.57
============
CLASS C:
Net assets, at value .................................................... $223,443,834
============
Shares outstanding ...................................................... 9,391,022
============
Net asset value and maximum offering price per share(a) ................. $ 23.79
============
ADVISOR CLASS:
Net assets, at value .................................................... $103,025,916
============
Shares outstanding ...................................................... 4,057,927
============
Net asset value and maximum offering price per share .................... $ 25.39
============

(a) Redemption price is equal to net asset value less contingent deferred sales
charges, if applicable.

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 21

Franklin Gold and Precious Metals Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended January 31, 2009 (unaudited)

Investment income:
Dividends: (net of foreign taxes of $285,913)
Unaffiliated issuers ............................................................ $ 13,802,214
Sweep Money Fund (Note 7) ....................................................... 131,064
Interest ........................................................................... 17,636
-------------
Total investment income ...................................................... 13,950,914
-------------
Expenses:
Management fees (Note 3a) .......................................................... 2,752,406
Distribution fees: (Note 3c)
Class A ......................................................................... 1,040,778
Class B ......................................................................... 197,124
Class C ......................................................................... 1,044,572
Transfer agent fees (Note 3e) ...................................................... 1,248,037
Custodian fees (Note 4) ............................................................ 118,226
Reports to shareholders ............................................................ 148,302
Registration and filing fees ....................................................... 106,082
Professional fees .................................................................. 41,119
Trustees' fees and expenses ........................................................ 52,161
Other .............................................................................. 64,042
-------------
Total expenses ............................................................... 6,812,849
Expense reductions (Note 4) .................................................. (668)
-------------
Net expenses .............................................................. 6,812,181
-------------
Net investment income .................................................. 7,138,733
-------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ..................................................................... (2,922,785)
Foreign currency transactions ................................................... (301,062)
-------------
Net realized gain (loss) ............................................... (3,223,847)
-------------
Net change in unrealized appreciation (depreciation) on:
Investments ..................................................................... (539,341,851)
Translation of other assets and liabilities denominated in foreign currencies ... (212,003)
-------------
Net change in unrealized appreciation (depreciation) ................... (539,553,854)
-------------
Net realized and unrealized gain (loss) ............................................... (542,777,701)
-------------
Net increase (decrease) in net assets resulting from operations ....................... $(535,638,968)
=============

The accompanying notes are an integral part of these financial statements.

22 | Semiannual Report

Franklin Gold and Precious Metals Fund

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS

SIX MONTHS ENDED
JANUARY 31, 2009 YEAR ENDED
(UNAUDITED) JULY 31, 2008
---------------- ---------------

Increase (decrease) in net assets:
Operations:
Net investment income ................................................................... $ 7,138,733 $ (1,201,751)
Net realized gain (loss) from investments and foreign currency transactions ............. (3,223,847) 40,039,868
Net change in unrealized appreciation (depreciation) on investments and translation of
assets and liabilities denominated in foreign currencies ............................. (539,553,854) 122,638,317
-------------- --------------
Net increase (decrease) in net assets resulting from operations ................... (535,638,968) 161,476,434
-------------- --------------
Distributions to shareholders from:
Net investment income:
Class A .............................................................................. -- (59,606,649)
Class B .............................................................................. -- (2,968,742)
Class C .............................................................................. -- (13,239,503)
Advisor Class ........................................................................ -- (4,264,295)
Net realized gains:
Class A .............................................................................. (4,209,958) (56,393,008)
Class B .............................................................................. (219,402) (3,268,164)
Class C .............................................................................. (1,115,501) (14,261,659)
Advisor Class ........................................................................ (463,121) (3,861,237)
-------------- --------------
Total distributions to shareholders ........................................................ (6,007,982) (157,863,257)
-------------- --------------
Capital share transactions: (Note 2)
Class A .............................................................................. (57,038,467) 292,702,634
Class B .............................................................................. (2,681,952) (3,432,880)
Class C .............................................................................. 1,243,781 81,576,070
Advisor Class ........................................................................ 17,362,507 52,919,737
-------------- --------------
Total capital share transactions ........................................................... (41,114,131) 423,765,561
-------------- --------------
Redemption fees ............................................................................ 4,342 70,989
-------------- --------------
Net increase (decrease) in net assets ............................................. (582,756,739) 427,449,727
Net assets:
Beginning of period ........................................................................ 1,806,723,686 1,379,273,959
-------------- --------------
End of period .............................................................................. $1,223,966,947 $1,806,723,686
============== ==============
Distributions in excess of net investment income included in net assets:
End of period .............................................................................. $ (88,471,882) $ (95,856,094)
============== ==============

The accompanying notes are an integral part of these financial statements.

Semiannual Report | 23

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Gold and Precious Metals Fund (Fund) is registered under the Investment
Company Act of 1940, as amended, (1940 Act) as an open-end investment company.
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.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed on a securities exchange or on the NASDAQ National Market
System are valued at the last quoted sale price or the official closing price of
the day, respectively. Over-the-counter securities and listed securities for
which there is no reported sale are valued within the range of the most recent
quoted bid and ask prices. Securities that trade in multiple markets or on
multiple exchanges are valued according to the broadest and most representative
market. Investments in open-end mutual funds are valued at the closing net asset
value.

Foreign securities are valued as of the close of trading on the foreign stock
exchange on which the security is primarily traded, or the NYSE, whichever is
earlier. If no sale is reported at that time, the foreign security will be
valued within the range of the most recent quoted bid and ask prices. The value
is then converted into its U.S. dollar equivalent at the foreign exchange rate
in effect at the close of the NYSE on the day that the value of the foreign
security is determined.

The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Due to the inherent uncertainty of
valuations of such securities, the fair values may differ significantly from the
values that would have been used had a ready market for such investments
existed. Occasionally, events occur between the time at which trading in a
security is completed and the close of the NYSE that might call into question
the availability (including the reliability) of the value of a portfolio
security held by the Fund. The investment manager monitors price movements
following the close of trading in foreign stock markets through a series of
country specific market proxies (such as baskets of American Depository
Receipts, futures contracts and exchange traded funds). These price movements
are measured against established trigger thresholds for each specific market
proxy to assist in determining if an event has occurred. If such an event
occurs, the securities may be valued using fair value procedures, which may
include the use of independent pricing services. All security valuation
procedures are approved by the Fund's Board of Trustees.

24 | Semiannual Report

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, income and expense items denominated in foreign currencies are
translated into U.S. dollars at the exchange rate in effect on the transaction
date. Occasionally, events may impact the availability or reliability of foreign
exchange rates used to convert the U.S. dollar equivalent value. If such an
event occurs, the foreign exchange rate will be valued at fair value using
procedures established and approved by the Fund's Board of Trustees.

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 on the
Statement of Operations.

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. SECURITIES PURCHASED ON A DELAYED DELIVERY BASIS

The Fund may purchase securities on a delayed delivery basis, with payment and
delivery scheduled for a future date. These transactions are subject to market
fluctuations and are subject to the risk that the value at delivery may be more
or less than the trade date purchase price. Although the Fund will generally
purchase these securities with the intention of holding the securities, it may
sell the securities before the settlement date. Sufficient assets have been
segregated for these securities.

D. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate at a future date. Realized and unrealized gains and losses on these
contracts are included in the Statement of Operations.

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts, which may be in
excess of the amount reflected in the Statement of Assets and Liabilities.

Semiannual Report | 25

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. INCOME TAXES

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

The Fund has reviewed the tax positions, taken on federal income tax returns,
for each of the three open tax years and as of January 31, 2009, and has
determined that no provision for income tax is required in the Fund's financial
statements.

Foreign securities held by the Fund may be subject to foreign taxation on
dividend and interest income received. Foreign taxes, if any, are recorded based
on the tax regulations and rates that exist in the foreign markets in which the
Fund invests.

F. 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 is
recorded on the ex-dividend date except that certain dividends from foreign
securities are recognized as soon as the Fund is notified of the ex-dividend
date. Distributions to shareholders are recorded on the ex-dividend date and are
determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States of
America. These differences may be permanent or temporary. Permanent differences
are reclassified among capital accounts to reflect their tax character. These
reclassifications have no impact on net assets or the results of operations.
Temporary differences are not reclassified, as they may reverse in subsequent
periods.

Realized and unrealized gains and losses and net investment income, not
including class specific expenses, are allocated daily to each class of shares
based upon the relative proportion of net assets of each class. Differences in
per share distributions, by class, are generally due to differences in class
specific expenses.

G. 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.

26 | Semiannual Report

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. REDEMPTION FEES

A short term trading redemption fee was imposed, with some exceptions, on any
fund shares that were redeemed or exchanged within seven calendar days following
their purchase date. The redemption fee was 2% of the amount redeemed. Such fees
were retained by the fund and accounted for as an addition to paid-in capital.
Effective September 1, 2008, the redemption fee was eliminated.

I. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified by the Fund against certain liabilities 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. Currently, the Fund expects the
risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At January 31, 2009, there were an unlimited number of shares authorized
(without par value). Transactions in the Fund's shares were as follows:

SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2009 JULY 31, 2008
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------

CLASS A SHARES:
Shares sold ...................... 8,473,344 $ 198,331,336 16,455,560 $ 642,590,673
Shares issued in reinvestment of
distributions ................. 211,509 3,703,528 2,793,112 101,724,854
Shares redeemed .................. (11,249,727) (259,073,331) (11,792,878) (451,612,893)
----------- ------------- ----------- -------------
Net increase (decrease) .......... (2,564,874) $ (57,038,467) 7,455,794 $ 292,702,634
=========== ============= =========== =============
CLASS B SHARES:
Shares sold ...................... 298,799 $ 5,855,443 387,880 $ 14,588,592
Shares issued in reinvestment of
distributions ................. 11,349 190,781 157,613 5,555,874
Shares redeemed .................. (404,828) (8,728,176) (654,065) (23,577,346)
----------- ------------- ----------- -------------
Net increase (decrease) .......... (94,680) $ (2,681,952) (108,572) $ (3,432,880)
=========== ============= =========== =============
CLASS C SHARES:
Shares sold ...................... 2,085,092 $ 47,045,105 3,931,713 $ 151,719,692
Shares issued in reinvestment of
distributions ................. 55,244 937,498 636,766 22,649,772
Shares redeemed .................. (2,143,004) (46,738,822) (2,482,227) (92,793,394)
----------- ------------- ----------- -------------
Net increase (decrease) .......... (2,668) $ 1,243,781 2,086,252 $ 81,576,070
=========== ============= =========== =============

Semiannual Report | 27

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. SHARES OF BENEFICIAL INTEREST (CONTINUED)

SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2009 JULY 31, 2008
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ --------- ------------

ADVISOR CLASS SHARES:
Shares sold ...................... 1,766,919 $ 36,930,758 1,692,601 $ 68,221,162
Shares issued in reinvestment of
distributions ................. 22,458 406,041 182,311 6,836,654
Shares redeemed .................. (924,902) (19,974,292) (559,298) (22,138,079)
--------- ------------ --------- ------------
Net increase (decrease) .......... 864,475 $ 17,362,507 1,315,614 $ 52,919,737
========= ============ ========= ============

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:

SUBSIDIARY 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

A. MANAGEMENT FEES

The Fund pays an investment management fee to Advisors based on the month-end
net assets of the Fund as follows:

ANNUALIZED FEE RATE NET ASSETS
- ------------------- ---------------------------------------------------

0.625% Up to and including $100 million
0.500% Over $100 million, up to and including $250 million
0.450% Over $250 million, up to and including $7.5 billion
0.440% Over $7.5 billion, up to and including $10 billion
0.430% Over $10 billion, up to and including $12.5 billion
0.420% Over $12.5 billion, up to and including $15 billion
0.400% In excess of $15 billion

B. ADMINISTRATIVE FEES

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.

28 | Semiannual Report

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

C. DISTRIBUTION FEES

The Fund's Board of Trustees has adopted distribution plans for each share
class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under
the 1940 Act. Under the Fund's Class A reimbursement distribution plan, the Fund
reimburses Distributors for costs incurred in connection with the servicing,
sale and distribution of the Fund's shares up to the maximum annual plan rate.
Under the Class A reimbursement distribution plan, costs exceeding the maximum
for the current plan year cannot be reimbursed in subsequent periods.

In addition, under the Fund's Class B and C compensation distribution plans, the
Fund pays Distributors for costs incurred in connection with the servicing, sale
and distribution of the Fund's shares up to the maximum annual plan rate for
each class.

The maximum annual plan rates, based on the average daily net assets, for each
class, are as follows:

Class A .......... 0.25%
Class B .......... 1.00%
Class C .......... 1.00%

D. SALES CHARGES/UNDERWRITING AGREEMENTS

Distributors has advised the Fund of the following commission transactions
related to the sales and redemptions of the Fund's shares for the period:

Sales charges retained net of commissions paid to
unaffiliated broker/dealers .................. $247,781
Contingent deferred sales charges retained ...... $143,692

E. TRANSFER AGENT FEES

For the period ended January 31, 2009, the Fund paid transfer agent fees of
$1,248,037, of which $766,850 was retained by Investor Services.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended January 31, 2009, the
custodian fees were reduced as noted in the Statement of Operations.

Semiannual Report | 29

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. INCOME TAXES

For tax purposes, realized currency losses and ordinary income losses occurring
subsequent to October 31, may be deferred and treated as occurring on the first
day of the following fiscal year. At July 31, 2008, the Fund deferred realized
currency losses and ordinary income losses of $363,995 and $42,768,904,
respectively.

At January 31, 2009, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:

Cost of investments ...................................... $ 942,356,218
=============
Unrealized appreciation .................................. $ 464,288,852
Unrealized depreciation .................................. (175,929,806)
-------------
Net unrealized appreciation (depreciation) ............... $ 288,359,046
=============

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

Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales, foreign currency
transactions, and passive foreign investment company shares.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the
period ended January 31, 2009, aggregated $75,062,088 and $92,649,882,
respectively.

7. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (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 and administrative
fees paid by the Sweep Money Fund.

8. CONCENTRATION OF RISK

Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.

30 | Semiannual Report

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

9. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES

The 1940 Act defines "affiliated companies" to include investments in portfolio
companies in which a fund owns 5% or more of the outstanding voting securities.
Investments in "affiliated companies" for the Fund for the period ended January
31, 2009, were as shown below.

NUMBER OF
SHARES NUMBER OF REALIZED
HELD AT SHARES VALUE AT CAPITAL
BEGINNING GROSS GROSS HELD AT END END OF INVESTMENT GAIN
NAME OF ISSUER OF PERIOD ADDITIONS REDUCTIONS OF PERIOD PERIOD INCOME (LOSS)
- -------------- --------- --------- ---------- ----------- ---------- ---------- --------

NON-CONTROLLED AFFILIATES
Central Sun Mining Inc. ............................ -- 3,105,100 -- 3,105,100 $2,150,259 $-- $--
========== === ===
TOTAL AFFILIATED SECURITIES (0.18% of Net Assets)

10. CREDIT FACILITY

Effective January 23, 2009, the Fund, together with other U.S. registered and
foreign investment funds managed by Franklin Templeton Investments
(individually, "Borrower"; collectively "Borrowers"), entered into a joint
syndicated senior unsecured credit facility totaling $725 million (Global Credit
Facility) to provide a source of funds to the Borrowers for temporary and
emergency purposes, including the ability to meet future unanticipated or
unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to
interest charged on any borrowings made by the Fund and other costs incurred by
the Fund, pay its share of fees and expenses incurred in connection with the
implementation and maintenance of the Global Credit Facility, based upon its
relative share of the aggregate net assets of all of the Borrowers, including an
annual commitment fee based upon the unused portion of the Global Credit
Facility. During the period, the Fund incurred commitment fees of $61 of its pro
rata portion of the Global Credit Facility, which is reflected in Other expenses
on the Statement of Operations. During the period ended January 31, 2009, the
Fund did not utilize the Global Credit Facility.

11. FAIR VALUE MEASUREMENTS

The Fund adopted Financial Accounting Standards Board (FASB) Statement No. 157,
"Fair Value Measurement" (SFAS 157), on August 1, 2008. SFAS 157 defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. The Fund has determined that the implementation
of SFAS 157 did not have a material impact on the Fund's financial statements.

Semiannual Report | 31

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

11. FAIR VALUE MEASUREMENTS (CONTINUED)

SFAS 157 establishes a fair value hierarchy that distinguishes between market
data obtained from independent sources (observable inputs) and the Fund's own
market assumptions (unobservable inputs). These inputs are used in determining
the value of the Fund's investments and are summarized in the following fair
value hierarchy:

- - Level 1 - quoted prices in active markets for identical securities

- - Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speed, credit risk, etc.)

- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.

The following is a summary of the inputs used as of January 31, 2009, in valuing
the Fund's assets carried at fair value:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------- ------- ---------- --------------

ASSETS:
Investments in Securities ..... $1,228,386,915 $-- $2,328,349 $1,230,715,264

At January 31, 2009, the reconciliation of assets in which significant
unobservable inputs (Level 3) were used in determining fair value, is as
follows:

INVESTMENTS
IN SECURITIES
-------------

Beginning Balance - August 1, 2008 ......................... $ --
Net realized gain (loss) ................................ --
Net change in unrealized appreciation (depreciation) .... (853,063)
Net purchases (sales) ................................... --
Transfers in and/or out of Level 3 ...................... 3,181,412
----------
Ending Balance ............................................. $2,328,349
==========
Net change in unrealized appreciation (depreciation)
attributable to assets still held at end of period ...... $ (853,063)
==========

32 | Semiannual Report

Franklin Gold and Precious Metals Fund

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

12. NEW ACCOUNTING PRONOUNCEMENT

In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years and interim periods beginning
after November 15, 2008. The Fund believes applying the various provisions of
SFAS 161 will not have a material impact on its financial statements.

ABBREVIATIONS

SELECTED PORTFOLIO

ADR - American Depository Receipt

Semiannual Report | 33

Franklin Gold and Precious Metals Fund

SHAREHOLDER INFORMATION

PROXY VOTING POLICIES AND PROCEDURES

The Fund's investment manager 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 (954) 527-7678 or by sending a written request to: Franklin Templeton
Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL
33394, Attention: Proxy Group. Copies of the Fund's proxy voting records are
also made available online at franklintempleton.com and posted on the U.S.
Securities and Exchange Commission's website at sec.gov and reflect the most
recent 12-month period ended June 30.

QUARTERLY STATEMENT OF INVESTMENTS

The Fund files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling (800)
SEC-0330.

34 | Semiannual Report

This page intentionally left blank.

Literature Request

LITERATURE REQUEST. TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT
(800) DIAL BEN/(800) 342-5236 OR VISIT franklintempleton.com. INVESTORS SHOULD
CAREFULLY CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. 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 FUNDS

VALUE

Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund(1)
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund(2)
Mutual Shares Fund

BLEND

Franklin Focused Core Equity Fund
Franklin Large Cap Equity Fund
Franklin Rising Dividends Fund

GROWTH

Franklin Capital Growth Fund(1)
Franklin Flex Cap Growth Fund
Franklin Growth Fund
Franklin Growth Opportunities Fund(3)
Franklin Small Cap Growth Fund(4)
Franklin Small-Mid Cap Growth Fund

SECTOR

Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Real Estate Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Mutual Financial Services Fund

GLOBAL

Mutual Discovery Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

INTERNATIONAL

Franklin India Growth Fund
Franklin International Growth Fund
Franklin International Small Cap Growth Fund
Mutual European Fund
Templeton BRIC Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Emerging Markets Small Cap Fund
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Frontier Markets Fund

HYBRID

Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Templeton Income Fund

ASSET ALLOCATION

Franklin Templeton Corefolio(R) Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives Allocation Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund

FIXED INCOME

Franklin Adjustable U.S. Government Securities Fund(5)
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund
Franklin Limited Maturity U.S. Government Securities Fund(5)
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
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
Templeton Global Total Return Fund
Templeton International Bond Fund

TAX-FREE INCOME(6)

NATIONAL FUNDS

Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(7)

LIMITED-/INTERMEDIATE-TERM FUNDS

California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC

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

INSURANCE FUNDS

Franklin Templeton Variable Insurance Products Trust(9)

(1.) The fund is closed to new investors. Existing shareholders and select
retirement plans can continue adding to their accounts.

(2.) 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.

(3.) Effective 11/1/07, Franklin Aggressive Growth Fund changed its name to
Franklin Growth Opportunities Fund. The fund's investment goal and strategy
remained the same.

(4.) Effective 3/31/08, Franklin Small Cap Growth Fund II changed its name to
Franklin Small Cap Growth Fund. The fund's investment goal and strategy
remained the same.

(5.) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

(6.) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are generally
taxable.

(7.) The fund invests primarily in insured municipal securities.

(8.) These funds are available in four or more variations, including long-term
portfolios, intermediate-term portfolios, portfolios of insured securities,
a high-yield portfolio (CA only) and money market portfolios.

(9.) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

12/08 Not part of the semiannual report

(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)

One Franklin Parkway
San Mateo, CA 94403-1906

SEMIANNUAL REPORT AND SHAREHOLDER LETTER

FRANKLIN GOLD AND PRECIOUS METALS FUND

INVESTMENT MANAGER
Franklin Advisers, Inc.

DISTRIBUTOR
Franklin Templeton Distributors, Inc.
(800) DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES
(800) 632-2301

Authorized for distribution only when accompanied or preceded by a prospectus.
Investors should carefully consider a fund's investment goals, risks, charges
and expenses before investing. The prospectus contains this and other
information; please read it carefully before investing.

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 S2009 03/09

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 12(a)(1), the Registrant is attaching as an exhibit a copy
of its code of ethics that applies to its principal executive officers and
principal 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 John B. Wilson 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 6. SCHEDULE OF INVESTMENTS. N/A

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

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. N/A

ITEM 10. 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 11. 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 12. EXHIBITS.

(a)(1) Code of Ethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Gaston Gardey, Chief Financial Officer, Chief Accounting Officer and Treasurer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Gaston Gardey, Chief Financial Officer, Chief Accounting Officer and Treasurer

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 PERCIOUS METALS FUND

By /s/LAURA F. FERGERSON
---------------------------------------
Laura F. Fergerson
Chief Executive Officer - Finance
and Administration
Date March 27, 2009

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/LAURA F. FERGERSON
---------------------------------------
Laura F. Fergerson
Chief Executive Officer - Finance
and Administration
Date March 27, 2009

By /s/GASTON GARDEY
---------------------------------------
Gaston Gardey
Chief Financial Officer, Chief
Accounting Officer and Treasurer
Date March 27, 2009