Billionaire investor, George Soros, revealed yesterday that he bought 1.05 million shares in SPDR Gold Trust in the first quarter of 2016. This is the biggest gold exchanged-traded fund in the world and is valued at around $123.5 million.
Soros once called gold “the ultimate bubble” but resumed buying gold ETFs and gold shares after a three-year hiatus. He’s clearly now bullish on gold and no longer views it as the “ultimate bubble.”
He also reduced his company’s investments in U.S. stocks by more than one third (does he see a stock collapse coming?). Continuing on his gold theme, Soros bought a $264 million stake in the world’s biggest bullion producer Barrick Gold Corp.
He foresees that a breakup of the Euro is a real possibility and he’s also talked about his concerns about the USA’s financial status. Both scenarios would boost the price of gold. He’s also declared his concerns for collapse of the Chinese economy (the engine that’s basically keeping the global economy afloat). Ratcheting things up a notch, he thinks we may be on the brink of World War III.
Since he’s been selling stocks, he’s putting his money where his mouth is. Soros Fund Management doubled its bet against the S&P 500 stock index according to its filing to the Securities and Exchange Commission yesterday.
His fortune allows him to have huge influence over markets. He nearly broke the Bank of England some years back when he manipulated the price of the pound pushing it sharply lower on international markets and badly impacting the UK economy.
Five years after that, he bet against Thai and Malaysian currencies which almost led to a global financial crisis.
That Soros is now buying gold is a very positive development for the gold market (however bad it looks for other markets). He joins other billionaire investors such as Singer, Dalio and Druckenmiller who are now investing in gold.
Given Soros’ awareness of financial, geo-political and indeed systemic risk, it is likely that he also owns physical gold bars in allocated accounts and not just ‘paper gold assets’ in the form of the more visible, publicly filed and high risk mining shares and gold SPDR trust.
Interestingly, most institutional and hedge funds bought gold in the first quarter too.
Maybe it’s time you do the same (as I’ve already done)?
