Are Hedge Funds Dumping Gold?
The price of gold continued its downward trend in the first quarter, falling from $1,675 to $1,600 an ounce. Sentiment reached new multi-year lows, but many well-known hedge funds are still maintaining their exposure to the precious metal.
Late Wednesday, many institutional investment managers filed their mandatory 13-F with the U.S. Securities and Exchange Commission. The filing is a quarterly report of equity holdings required by managers that oversee more than $100 million in qualifying assets, and it must be filed within 45 days of the end of each quarter. The 13-F provides a peek at what hedge funds did in the previous quarter, but investors should keep in mind that hedging and trading strategies of each fund are still unknown.
Listed below are details on how popular hedge funds invested in gold names in the first quarter of 2013:
Billionaire fund manager John Paulson is known for betting against subprime mortgages during the housing bubble, but he is also a vocal advocate for gold. Last year, he said in a letter to investors, “By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position in gold.”
Some have speculated that his eventual unwinding of SPDR Gold Trust shares would collapse the ETF’s price, but this has yet to occur. In fact, Paulson continues to keep a very large position in the fund. His firm Paulson & Co. Inc. held 21.8 million shares at the end of March, unchanged from the previous quarter, but higher than the 17.3 million shares held in the beginning of 2012.