Paulson stays with Gold ETF as prices recover $GLD
Paulson stays with Gold ETF as prices recover
Prominent hedge fund manager John Paulson held onto his investments in the SPDR Gold Trust as gold prices bounced back after tensions in Ukraine and Russia escalated in August.
Gold rebounded to 8% after its prices sharply declined by 28% last year. Its increase in price reached a 6-month high in the first quarter of 2014 due to the political instability in Ukraine.
The Paulson & Co. holds the largest holdings in the biggest gold-backed ETF, with a stake that’s equivalent to 10.23 million. The investment management firm’s shares remained the same from March of this year to August.
Private investors follow the decisions of distinguished fund managers when it comes to investing in ETFs, since the latter has more experience and better insight into the sentiments of traders toward gold as insurance against market uncertainty and inflation. As of this writing, BullionVault’s live price data shows that the precious yellow metal’s prices swing between $1,280 -$1,300 per ounce.
Paulson’s investment management company shares in the SPDR Gold Trust were already worth around $1.30 billion in June. These numbers represent an increase of an estimated $45 million as the spot price of the precious yellow metal rose 3.5% in the second quarter of the year.
Fear of having high interest rates in the U.S., however, is making a lot of traders transfer their assets away from gold. High interests would mean lower gold prices, which will make investors move their money from non-interest yielding investments to high-yielding ones. Precious metals such as gold are an example of a non-interest yielding investment.
Paulson became interested in Gold ETF investments in 2009 in the hopes of gold prices will increase due to the then-relentless stimulus package of the U.S. government.