UPDATE 2-Paulson cuts stake in biggest gold ETF ahead of price dive

Fri Aug 14, 2015 6:13pm EDT
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(Adds comment, additional filings, background on demand)

By Marcy Nicholson

NEW YORK Aug 14 (Reuters) - Hedge fund Paulson & Co cut its stake in the world's biggest gold-backed exchange-traded fund in the second quarter of 2015, after holding it unchanged for six straight quarters, just before prices took a tumble, a filing showed on Friday.

The move came just before spot gold prices tumbled 6.6 percent in July, their weakest monthly performance in more than two years after a steep selloff in Shanghai and New York, and on expectations for the U.S. Federal Reserve to raise rates as early as September.

"It appears Paulson was astute to lighten up some before the July plunge," said Mike McGlone, director of research for ETF Securities in New York.

"They may have been part of the massive liquidation in July too."

Bullion prices fell 1 percent in the second quarter.

New York-based Paulson & Co, led by longtime gold bull John Paulson, cut its stake in SPDR Gold Trust by 1 million shares to 9.2 million shares worth $1.04 billion in the quarter ending June 30, according to the 13F-HR filing.

The sharp reduction came as SPDR holdings fell by 3.5 percent in the quarter, with holdings falling another 6 percent from the end of June to the lowest since 2008 this week at 21.5 million ounces.   Continued...