February 16, 2016 / 5:18 PM / in 2 years

CORRECTED-UPDATE 2-Paulson slashed bullish gold bets before prices rocketed

(Correcting 5th para to show the Fed raised rates, not cut them)

By Marcy Nicholson

NEW YORK, Feb 16 (Reuters) - John Paulson, one of the world’s most influential gold investors, slashed his bullish bets on bullion at the end of last year, just before the beleaguered market took off for its biggest rally in years, a federal filing showed on Tuesday.

The New York-based hedge fund Paulson & Co, led by the longtime gold bull, cut its stake in SPDR Gold Trust, the world’s biggest gold exchange-traded fund (ETF), by 37 percent in the fourth quarter. It was Paulson’s third cut to its SPDR stake in 2-1/2 years.

The recent cut brought the stake to 5.78 million shares worth $585.9 million on Dec. 31, the U.S. Securities and Exchange Commission filing showed.

It followed a heftier cut in the second quarter 2013 when Paulson almost halved his stake from 21.8 million shares, during gold’s historic sell-off.

The move by the single largest SPDR gold shareholder highlights how investors shunned gold as the U.S. Federal Reserve prepared to raise interest rates in December for the first time in a decade.

Paulson’s view on gold has been closely followed since he earned roughly $5 billion on a bet on the metal in 2010, following a similarly successful $4 billion payday on his bet against the overheated housing market in 2007.

Others, like Soros Fund Management LLC and Jana Partners LLC, which had already eliminated large stakes from Market Vectors Gold Miners ETF earlier in the year, stayed out.

Also in the quarter ended Dec. 31, Caxton Corp eliminated its stake in Market Vectors Gold Miners ETF, having held 31,733 shares worth $436,000 in the third quarter, the filing showed.

OUTFLOWS AND SINKING PRICES

Prices have fallen each year since 2013, after the Fed first indicated it would start reining in stimulus spending and signaled the end a low interest-rate era.

In December, the price of spot gold fell to the lowest level in nearly six years at $1,045.85 per ounce, as investors rushed to riskier assets, like equities, ahead of the hike.

Since then, gold has rallied just over 20 percent, hitting $1,260.60 an ounce last Thursday, a one-year high for the biggest surge since September 2011, as concern about global economic growth helped revive gold’s safe-haven appeal.

In contrast to Paulson, CI Investments Inc, an investment manager of Toronto-based CI Financial Corp, raised its stake in SPDR to 944,579 shares worth $95.8 million, according to a filing earlier this month. (Editing by Tom Brown and Matthew Lewis)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below