Tags: Heavyweight | money | managers | gold

WSJ: Heavyweight Money Managers Give Gold a Lift

By Dan Weil   |   Friday, 24 Aug 2012 09:59 AM

Big-time investors have turned bullish on gold, or more bullish in some cases, helping to spark gold’s current rally and possibly guaranteeing it will continue.

Among the top money managers hot for gold are Pimco, George Soros, John Paulson and Sprott Asset Management, The Wall Street Journal reports.

The precious metal hit a four-month high of $1,677.50 Thursday. Signs from the Federal Reserve that it might soon launch another round of quantitative easing sparked the latest advance, and Europe’s continuing financial crisis also is boosting gold.

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Pimco’s $21 billion CommodityRealReturn Strategy Fund has increased its gold holdings to 11.5 percent of assets from 10.5 percent two months ago, fund co-manager Nicholas Johnson tells The Journal.

He expects inflation to begin accelerating about a year from now, pushing up gold. "We prefer owning real assets as opposed to financial assets," Johnson says.

Meanwhile, hedge fund titans Paulson and Soros increased their wagers on gold in the second quarter, with Soros Fund Management doubling its stake in SPDR Gold Shares fund.

As for Sprott, "I wouldn't be at all surprised to see a new record [for gold] this year," Eric Sprott, its chief investment officer, tells The Journal.

Less famous market participants are excited about gold too.

“This is a pretty clear breakout” for the metal after months of range-bound trading, and it will continue, barring unexpected progress in Europe, Matt Zeman, head trader and strategist at Kingsview Financial, tells MarketWatch.com.

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