Soros Fund Management slashes gold stake

16 Aug 2016

Soros Fund Management sharply cut its shares in gold in the second quarter, when bullion prices rose to two-year highs. 

Accordingto the U.S. fundsregulators, the fund which returned to the world's biggest gold exchange-traded fund SPDR Gold Trust in the first quarter of 2016 after a three-year absence, sharply cut its stake in the second quarter. Billionaire financier George Soros' fund reduced its holdings in SPDR Gold Trust to 240,000 shares worth $30.4 million, from 1.05 million shares worth $123.5 million in the first quarter.Soros also drastically cut its stake in Barrick Gold - to 1.07 million shares worth $22.9 million, from 19.4 million shares in the first three months of 2016, the filing showed. Investors have been more proactive cutting holdings in the miners, some of whom have drastically outperformed the underlying in the first half of the year. It may not suggest that they are necessarily bearish gold but rather taking opportune profit. The move came as spot gold prices rose 7 percent in the second quarter, following a 16 percent surge in the first quarter, the strongest in nearly three decades as expectations for a U.S. interest rate hike faded. Besides, prices rallied in June, when the United Kingdom voted to leave the European Union. New York-based Paulson & Co, led by John Paulson, kept its stake in SPDR Gold Trust unchanged in the second quarter at 4.78 million shares worth $603.9 million. Theywereworthnearly $562 millioninthefirstquarter. On the one hand, now there is no real reason for the fall in gold prices since the instability of the global economy encourages investors increasingly rely on gold as a "safe haven". But the shares of investors such as Soros could trigger the other participants to leave the market. However, even if now there will be a drop in the wake of profit-taking, with the long-term point of view, gold has excellent prospects. At the moment, prices are around $1,348 an ounce, but analysts are already predicting the levels of $1,425-1,450 in the coming months.