Tags: Soros | Mindich | Gold | Holdings

Paulson Holds Onto Gold as Soros Cuts Further

Tuesday, 16 Aug 2011 09:00 AM

George Soros, Eric Mindich and Scout Capital Management LLC cut their holdings in the SPDR Gold Trust as prices rallied to a record during the second quarter, while Steven A. Cohen’s SAC Capital Advisors LP bought options on the exchange-traded fund, government records show.

Soros Fund Management LLC held 42,800 shares of SPDR Gold Trust as of June 30, compared with 49,400 at the end of the first quarter, a filing yesterday with the U.S. Securities and Exchange Commission showed. Mindich’s Eton Park Capital Management LP reduced its stake to 813,000 shares from 2.328 million, a separate filing showed. SAC Capital purchased call options linked to the SPDR Gold Trust valued at $627.7 million.

Gold prices have surged 44 percent in the past year, touching a record $1,817.60 an ounce in New York last week, as Europe’s debt crisis and the prospect of a global economic slowdown boosted demand for the metal as a haven. Some investors may have sold the metal amid the financial turmoil, according to James Dailey of TEAM Financial Management LLC.

“Funds were confused about the behavior of the market, and they probably thought it would be better to sit on cash rather than lose money,” Dailey, who manages $185 million at TEAM Financial, said in a telephone interview from Harrisburg, Pennsylvania.

Scout Capital Management cut its stake in the SPDR Gold Trust to 600,000 shares as of June 30, down 480,000 from the first quarter, a government filing showed.

‘Ultimate Asset Bubble’

At the end of the fourth quarter, Soros owned 4.721 million shares of SPDR Gold and sold most of his holdings in the three months ended March 31. In January last year, the 81-year-old investor described the precious metal as “the ultimate asset bubble.” Prices are headed for an 11th straight year of gains.

Michael Vachon, a spokesman for Soros, didn’t immediately respond to a voicemail left by Bloomberg outside normal business hours requesting comment.

Mindich of Eton Park declined to comment. Jonathan Gasthalter, a spokesman for SAC, didn’t immediately respond to a voicemail left by Bloomberg outside normal business hours requesting comment.

Investors in gold-backed exchange traded products own 2,185.9 metric tons of metal, more than all except four central banks hold, according to Bloomberg calculations.

Gold futures for December delivery gained $8.40, or 0.5 percent, to $1,766.40 an ounce as of 10:40 a.m. Singapore time on the Comex in New York.

Shares of SPDR Gold climbed 4.4 percent in the second quarter, an 11th straight gain, and since June 30 they have jumped 18 percent as Standard & Poor’s lowered its credit rating for the U.S., stoking concern that the global economic recovery may be at risk.

Paulson & Co.

Paulson & Co., the U.S. hedge fund run by John Paulson, maintained 31.5 million shares in the SPDR Gold Trust. Armel Leslie, a spokesman for New York-based Paulson, declined to comment on the filing.

“People continue to see gold as a store of value,” Dailey of TEAM Financial said.

Money managers who oversee more than $100 million in equities must file a Form 13F with the Securities and Exchange Commission within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.

ETPs trade on exchanges, with each share representing metal held in a vault.

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George Soros, Eric Mindich and Scout Capital Management LLC cut their holdings in the SPDR Gold Trust as prices rallied to a record during the second quarter, while Steven A. Cohen s SAC Capital Advisors LP bought options on the exchange-traded fund, government records...
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2011-00-16
Tuesday, 16 Aug 2011 09:00 AM
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