Tags: Paulson | SPDR | gold | miners

Paulson Stays Bullish on Gold

By Dan Weil   |   Wednesday, 27 Feb 2013 11:02 AM

While gold’s 9 percent drop since Oct. 1 has turned many investors bearish toward the metal, hedge fund heavyweight John Paulson, founder of Paulson & Co., remains steadfast.

At least he was as of Dec. 31, when he held the largest position in the SPDR Gold Shares exchange-traded fund — almost 22 million shares, The Wall Street Journal reports. Paulson didn’t sell any shares last quarter.

The firm also retains large stakes in gold miners AngloGold Ashanti, Detour Gold, NovaGold Resources and Barrick Gold.

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Paulson may have changed his gold-derivative positions, but he has let his clients know that he thinks gold is headed higher long term, according to The Journal.

Gold will benefit from continued global central bank easing and the inflation it creates, he believes. But the clients say Paulson hasn’t moved to increase his gold exposure.

A few other hedge fund managers agree with Paulson, according to The Journal. For example, Och-Ziff Capital Management increased its stake in SPDR Gold Shares last quarter.

However, George Soros’ Soros Fund Management got rid of almost half of its position — approximately $100 million — in SPDR Gold Shares last quarter, after increasing its stake in the third quarter. People close to the firm said the move wasn’t related to a change in belief on gold.

Peter Schiff, CEO of Euro Pacific Capital, is rabidly bullish on gold. He has argued for months that it will reach $5,000 an ounce.

The current downdraft is merely a correction, he tells CNBC. “I never said it wouldn’t be a bumpy road.” Gold has endured many setbacks during its 13-year rally.

“A lot of people have been scared out of the market, and then the market makes new highs,” Schiff says. “The fundamental case for gold is as strong as it’s ever been.” The primary bullish factor is Federal Reserve easing, he explains.

Spot gold traded at $1,608.60 early Wednesday.

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While gold’s 9 percent drop since Oct. 1 has turned many investors bearish toward the metal, hedge fund heavyweight John Paulson, founder of Paulson & Co., remains steadfast.
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2013-02-27
 

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