Tags: Sprott | gold | fund | stocks

Big-time Gold Bug Sprott Sidelined by Gold's Drop

By    |   Friday, 13 December 2013 08:16 AM

Gold's 36 percent plunge from its September 2011 record high has made a casualty out of renowned Canadian hedge fund manager Eric Sprott, one of the precious metal's strongest advocates.

His flagship fund has plummeted more than half in 2013 in what will likely be the third straight year of double-digit percentage losses, according to documents sent to investors, The Wall Street Journal reports.

Where Sprott managed almost $3 billion of hedge fund assets in 2008, now it's down to about $350 million.

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It's his unwavering faith in gold and other precious metals that has cost him. Spot gold traded at $1,227 Thursday afternoon, down 27 percent so far this year.

Sprott is being shunned within his own investment company — Sprott Inc. announced last month that he will no longer be part of investment decisions.

He has fared far worse than the HFRX Macro: Commodity-Metals Index, which measures hedge fund managers with at least 50 percent exposure to metals and has dropped 28 percent so far this year.

Sprott suffered from his exposure to weak mining stocks and his short exposure to strong foreign stocks, The Journal notes.

On Tuesday, gold suffered its biggest drop in 10 weeks amid worry that the Federal Reserve will curb its bond buying soon.

"It looks plausible that gold eases back towards $1,220 as we move toward the Fed decision," Bjarne Schieldrop, chief commodity analyst at SEB AB in Oslo, tells Bloomberg.

"However, looking at next year, we are not so overly bearish, as interest rates will continue to be a record low, and QE [quantitative easing] will continue for a while, even if it will be gradually reduced.”

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Gold's 36 percent plunge from its September 2011 record high has made a casualty out of renowned Canadian hedge fund manager Eric Sprott, one of the precious metal's strongest advocates.
Sprott,gold,fund,stocks
318
2013-16-13
Friday, 13 December 2013 08:16 AM
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