It was recently reported that both George Soros and John Paulson have upped their gold and gold stock exposure in the last fiscal quarter.
Soros more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares.
Paulson has been a strong proponent of gold since 2008.
In 2009, Paulson stated:
“What I’m looking at is not where gold is going to be tomorrow, one week from now, one month from now, three months from now. What I’m looking at is where is gold going to be vis-a-vis the dollar one year from now, three years from now, five years from now. And I think, with a high probability at each of those points, gold will be higher than it is relative to the dollar today. That probability increases the further out you go. So when I look at what the risk is, the risk to me is far more staying in dollars than it is in gold at this point.”
What is interesting is that Paulson appears to have doubled down on his gold position.
He added to his holdings of NovaGold last quarter and sold other stocks, leaving his $21 billion hedge fund with more than 44 percent of its U.S. traded equities tied to bullion.
Paulson’s U.S.-listed holdings peaked at $34.3 billion at the end of March 2011, with about $7.7 billion of that amount, or 23 percent, invested in gold related stocks. He had 33 percent of his U.S. stock holdings in gold-related securities at the end of the first quarter and 25 percent a year ago.
The timing for Paulson’s move is most likely spot on as gold tends to outperform after the summer doldrums and as we head into the Indian wedding season.