Tags: gold | invest | precious metals | prices

3 Billionaires Bet Big on Gold Despite Worst Slump Since '84

3 Billionaires Bet Big on Gold Despite Worst Slump Since '84
(AP)

By    |   Thursday, 31 December 2015 11:51 AM

Investing icons Stanley Druckenmiller, John Paulson and Ray Dalio continue to wage big bets on gold, despite the precious metal heading for its longest slump in more than 30 years as investors sold from bullion-backed funds.

Gold has fallen roughly 45% from the highs it reached less than five years ago, the Motley Fool reports, but Druckenmiller is one of the top 10 holders of SPDR Gold Trust (GLD).

Druckenmiller, who was the chief strategist for George Soros, is putting a fairly large chunk of his $4 billion or so fortune into his gold bet through his personal investment vehicle, Duquesne Family Office. His roughly 2.9 million shares of SPDR Gold Trust are worth around $300 million.

For his part, Paulson and his hedge fund group Paulson & Co. continue to believe in gold.

According to regulatory filings, the 9.2 million or so shares of SPDR Gold Trust his company owns are worth around $900 million at recent prices.

“To be fair, he doesn't have as large a stake in gold right now as he did in 2010. What's interesting here is that in late August, Paulson called gold fairly valued. It's only kept falling since then,” Reuben Brewer explains.

“Moreover, he has noted that gold has a place in portfolios as insurance against the unexpected. With the Fed starting to raise interest rates, the risk of unintended consequences looks like it just started to heat up. Keep an eye on Paulson's gold bet...if he starts to up his stake, you'll want to take notice.”

Finally, Dalio, founder of Bridgewater Associates, has been quoted as saying, "If you don't own gold, you know neither history nor economics."

Dalio isn't getting his exposure to gold through the SPDR Gold Trust, he's investing directly in gold miners Newmont Mining (NEM), Barrick Gold (ABX), and Goldcorp (GG).

Gold’s image as a haven asset has taken a battering as investors sold from bullion-backed funds, Bloomberg reports.

Bullion futures headed for the sixth straight quarterly loss, the longest slump since 1984, and are down 10 percent this year. Prices, which were little changed on Thursday, have plunged about 45 percent since reaching a record in 2011.

The metal also is heading for its third annual loss, the longest run since 1998, as the dollar surged on the back of tighter monetary policy in the U.S, joining a collapse in prices of commodities from iron ore to oil. Holdings in gold exchange-traded products have declined 10 times in the last 13 sessions to 1,466.4 metric tons, near the lowest in more than six years, Bloomberg reported.

“Gold is suffering from the general exodus out of commodity investments,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “Being one of the most-traded commodities through ETFs, the selling pressure from paper investors has been felt particularly hard and gold’s safe-haven status has suffered.”

Gold futures for February delivery added 0.1 percent to $1,061.20 an ounce at 10:38 a.m. on the Comex in New York. The metal reached a five-year low earlier this month. Prices may approach $1,000 in 2016, before recovering toward $1,200 by the end of the year as the dollar and bond yields retreat, Hansen told Bloomberg.

(Newsmax wire services contributed to this report).

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Gold's image as a haven asset has taken a battering with the metal heading for its longest slump in more than 30 years as investors sold from bullion-backed funds.
gold, invest, precious metals, prices
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2015-51-31
Thursday, 31 December 2015 11:51 AM
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