Paulson Continues Gold Strategy

Chidem Kurdas

In January John Paulson started to climb out of the deep pool of red ink he got into last year but in February he went the wrong way, in part because gold prices declined. Despite that Mr. Paulson does not seem have changed his investment strategy.

His gold holdings are less than they were a year ago but substantial nevertheless. Paulson & Co. funds continue to hold $2.63 billion in the exchange-traded SPDR Gold Trust and $1.5 billion in Anglogold Ashanti. The funds still have large positions in Gold Fields Ltd., Iamgold Corp., Novagold and Randgold Resources.

Some of this is probably in the Paulson gold fund or is meant as a hedge for gold-denominated shares.

In the past two years Mr. Paulson has said that he expects inflation in high-single or even double-digit rates. That goes with a bullish outlook on the economy, since higher inflation would be unlikely in a double-dip recession. The large gold holdings suggest he’s still relatively bullish despite the European debt crisis.

In 2011 that outlook lost his investors a lot of money but this January the Paulson funds had big gains, in particular the gold fund but also others—a version of his event-driven strategy returned nearly 6%.

Advertisements

Tags: , , , , , ,

3 Responses to “Paulson Continues Gold Strategy”

  1. Sector ETF Trading Takes Off « HedgeFundSmarts Says:

    […] trader favorites, such as the iShares Russell 2000 Index Fund and  also the SPDR Gold Trust, used by John Paulson, for […]

  2. Paulson Gets Copper from Gold « HedgeFundSmarts Says:

    […] is only one of the various investments that constitute Paulson & Co.’s large position in gold, a position that includes a gold exchange-traded fund and has grown even as gold lost some of its […]

  3. Gold Glitter Trumps Platinum Value « HedgeFundSmarts Says:

    […] BlueCrest holds the SPDR gold ETF and Market Vectors gold miners ETF.  John Paulson, of course, led the way in buying gold. […]

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: