Gold investors appear to have followed the lead of investors
. Both hedge fund managers recently revealed increased positions
in gold and gold stocks.
Paulson raised his stake in GLD by 26 percent in the second
quarter. Soros more than doubled his holdings of GLD.
According to a recent Bloomberg story both money managers see big
gains ahead for the yellow metal.
"Paulson & Co., which owns the biggest stake in the SPDR Gold
Trust, increased its holdings to 21.8 million shares in the three
months through June. The New York-based $21 billion hedge fund
firm had more than 44 percent of its U.S. traded equities tied to
bullion, or 16 percent excluding the SPDR Gold Trust product, the
filing showed. Paulson uses his stake in the product to back
shares that are denominated in gold. Soros Fund Management LLC
raised its stake to 884,400 shares."
The expectation is that Bernanke will announce QE3 at the Jackson
Hole meeting in September. Investors will recall that Bernanke
announced QE2 at a similar meeting in 2010.
Interestingly, demand for physical gold has been slowing in
recent quarters. Sales at the US Mint have dropped by 49 percent
to 30,500 ounces last month. This level of sales was last seen in
Thus, it would appear that the hedge fund managers might be
loading up on gold for a trade ahead of QE3 rather than buying
gold for a long term position.
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