Market Chatter: Soros Buying Gold as Record Prices Seen on Stimulus
Gold's 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever, Bloomberg reported.
The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11% more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49% in the third quarter, U.S. Securities and Exchange Commission filings show.
"We see gold as a hedge against the follies of politicians," said Michael Mullaney, who helps manage $9.5 billion of assets as chief investment officer at Fiduciary Trust in Boston. "It's a good time to garner some protection in portfolios by having some real asset like gold."
Gold advanced 11% to $1,730.23 in London this year, headed for a 12th consecutive annual gain, the longest streak in data compiled by Bloomberg going back to 1920. Prices reached a record $1,921.15 in September 2011.
Bullion held through ETPs, the first of which listed in 2003, reached a record 2,604.2 tons yesterday, valued at $144.9 billion. That exceeds the official reserves of every nation except the U.S. and Germany, World Gold Council data show. The SPDR Gold Trust alone holds 1,342.2 tons.
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