John Paulson’s Gold Holdings Reduced in June: What’s Next?
Paulson sold gold holdings
Billionaire hedge-fund manager John Paulson is one of the best-known gold bulls in the markets. The last time Paulson cut his gold holdings was in July. This decrease in gold holdings was the first time in two years that Paulson was slightly bearish on gold.
The bullion markets took a hit in July. The prices touched a low of $1,073 per ounce of gold. The fall in the prices was also impacted by the curb in gold holdings of the big investors in the markets. Paulson reduced his stake in the largest exchange-traded product, the SPDR Gold Shares (GLD), by almost 10%. The firm held the same holdings in gold unchanged for nearly seven straight quarters. Most gold bugs were impacted negatively due to routing in commodity markets. Currently, a bearish sentiment prevails in the bullion markets.
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The most important factor that led to the fall in the precious metal prices is the next increase in the interest rates. Gold and the other precious metals don’t have cash flows. It’s expected to lose is luster as the rate hike gets closer. Gold’s current trading price is at $1,051 per ounce as of Friday, November 27. Paulson & Co. gave up almost one million of its shares from its ~10.23 million share holding in GLD.
Tracking the ETFs and miners
Besides GLD, some other ETFs that suffered during 2015 include the VanEck Vectors Junior Gold Miners ETF (GDXJ) and the iShares Gold Trust (IAU). They lost 21.70% and 10.70%, respectively, on a YTD (year-to-date) basis.
Mining stocks like Alamos Gold (AGI), Eldorado Gold (EGO), and Cia de Minas Buenaventura (BVN) are the biggest losers on a YTD basis. They account for ~8.20% of the price changes in the VanEck Vectors Gold Miners ETF (GDX).