Soros Buying Gold Posted by James Randolph on June 06, 2012
Gold markets around the world are enduring a multi-month slump but investors
such as billionaire George Soros, who have increased their positions in gold during
this time of low prices show that buying gold during a slump such as the one we’re
experiencing is a very good opportunities.
Gold has been down as much as 21% from the all-time nominal record of
$1923.70 set on September 6, 2011. From the period of December and January 2011
until May 2012, gold has fallen 10% in a four-month streak, causing many investors to
question the status and state of the market.
The gold bears will always come out of the woodwork when it’s relatively safe,
though it is notable that this time no one is declaring an end to the gold bull market,
after raucous embarrassment brought notoriety to investors declaring the end of the bull
market in November and December 2011.
George Soros is the 81-year-old founder of Soros fund management LLC and
security and exchange commission filings show that the fund more than tripled its
investment in the SPDR Gold Trust during the first quarter, valued at $50.2 million
according to a May 15 SEC filing. Soros brought notoriety to himself when he called
gold, “the ultimate asset bubble” back in January of 2010. Clearly Mr. Soros’s words do
not speak as loudly as his multimillion dollar buying gold actions.
There are other major investors who have been scooping up gold during the first
quarter. John Paulson, legendary hedge fund manager, holds an even larger position in
gold than Soros. The SEC filing on May 15 showed that his stake is now valued at $2.72
Major banks including Goldman Sachs, Morgan Stanley and Barclays have
been issuing reports predicting higher prices and goals by the end of this year, and even
higher prices in the coming year. The most conservative of these projections places gold
higher than the previous all-time nominal high. At times during the past six months,
those reports and projections have been updated and the price projection was higher and
slid forward on the timeline. Currently, it appears most major banks are revising their
timelines and their projections based on current economic data, still placing gold at much
higher prices in the coming year but definitely putting their projected price range out a bit
on the timeline.
One of the best ways to make sense of the current market is to watch what the big
players are doing. George Soros and John Paulson are certainly very big fish in the pond
that have a lot of experience with the market as well as a lot of exposure in the market.
Watching their activities can most definitely provide a lot of insight into where the
market will be headed in the future. With both Soros and Paulson taking extremely large
positions in gold during this time of a relative slump in gold prices, the average investor looking to hedge their positions in other markets and store their wealth in a more stable financial vehicle can learn a lot about buying gold from their heavy market activities.