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Gold May Climb as Drop Attracts Buyers, Paulson Maintains Bet

Tuesday, 16 Aug 2011 09:05 AM

Gold may climb for a second day as physical buyers made purchases after the metal’s drop from its all-time high above $1,800 an ounce, and Paulson & Co., a hedge fund run by John Paulson, stuck with a bet on further gains.

Immediate-delivery bullion, which reached an all-time high of $1,814.95 on Aug. 11, was little changed at $1,763.85 at 9:39 a.m. in Singapore. December-delivery gold climbed for a second day, rising as much as 0.8 percent to $1,772.70 on the Comex.

Paulson & Co. maintained 31.5 million shares in the SPDR Gold Trust at the end of the second quarter, according to a filing with the Securities and Exchange Commission. He’s the biggest investor in the largest exchange-traded fund backed by gold. Investor George Soros cut his holdings in the period.

“We’ve seen physical buyers come back into the market and inquiries have picked up as prices fell toward the $1,730, $1,720 level,” said Liu Yangyi, a manager at China National Pearl Diamond Gem & Jewelry Import & Export Corp. The company is a member of the Shanghai Gold Exchange, China’s largest physical market. “Physical buyers are adjusting to higher prices.”

Gold has surged 24 percent in 2011, set for an 11th year of gains, as the debt crisis in Europe, slower U.S. growth and inflation in China have boosted investor and central-bank demand. The metal held in exchange-traded products gained for the first day in three yesterday, rising to 2,185.853 metric tons, after reaching a record 2,216.756 tons on Aug. 8, Bloomberg data show.

Soros Fund Management LLC held 42,800 SPDR Gold shares as of June 30, compared with 49,400 at the end of the first quarter, a separate filing showed. Total assets in SPDR Gold reached a record 1,309.92 tons on Aug. 8 as Standard & Poor’s cut of the U.S. credit rating and speculation that Europe’s sovereign-debt crisis may be worsening fueled demand.

Cash platinum gained as much as 0.5 percent to $1,817.88 an ounce, the highest price since July 27. Spot silver dropped 0.7 percent to $39.5875 an ounce, while palladium rose 0.5 percent to $753.25 an ounce.

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Gold may climb for a second day as physical buyers made purchases after the metal s drop from its all-time high above $1,800 an ounce, and Paulson Co., a hedge fund run by John Paulson, stuck with a bet on further gains.Immediate-delivery bullion, which reached an...
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2011-05-16
Tuesday, 16 Aug 2011 09:05 AM
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