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John Paulson Remains Heavily Vested in Gold Mining Stocks and the SPDR Gold Trust
Pinnacle Digest writes: The US dollar, gold and silver all retreated on Thursday as traders brace for disappointment from the Fed’s Jackson Hole meeting. However, famed hedge-fund manager, John Paulson, remains heavily weighted in gold with no sign of offloading anytime soon.
If the Fed does not announce additional QE or some form of monetary easing on Friday, gold will surely be the most vulnerable as the precious metal has rallied over $100 an ounce over the last couple weeks. At the start of the month, after consecutive months of disappointing news from the US economy, traders began placing bets on higher gold prices. Perhaps it was a knee jerk reaction, as today traders began dumping gold this week just in case Bernanke holds off on further easing. With that stated, Adrian Ash explains in his latest article that traders from Commerzbank's commodities team in Frankfurt believe "the currently very brisk levels of investment demand should prevent any serious fall in gold prices,"
Demand remains very strong for gold bullion and it’s our belief that the overall market believes another round of QE is inevitable, whether the Fed announces it tomorrow or not.
Adrian Ash stated in his recent article that “Investors using exchange-traded funds to buy gold exposure again increased their position on Wednesday, according to global data from Bloomberg, taking this run to a 7th day and extending August's growth in physical backing to 65 tonnes – a rise of nearly 3% for the month.”
John Paulson Still Very Bullish on Gold
While John Paulson’s worst performing fund this year is his gold fund, the famed hedge-fund manager now owns 12% of the $65 billion SPDR Gold Trust. Despite receiving much criticism for his poor market performance, Paulson remains overweight in gold and that doesn’t appear to be changing after his latest conference call.
Adrian Ash states that “Besides holding 12% of the $65 billion SPDR, the Paulson Gold Fund holds sizeable stakes in several gold mining companies.”
Click here to read Adrian Ash’s report on the gold market.