Top Hedge Fund Managers Still Believe in Gold

Gold bugs rejoice — major hedge fund managers Ray Dalio and John Paulson are still rooting for the precious metal.

The yellow metal moved ahead 1.7 percent in 2018’s first quarter, pushed forward by a steadily weakening US dollar, which helped it dodge repercussions from rising US borrowing costs.

However, gold took a nasty tumble this week due to rising interest rates — it slipped below the US$1,300-per-ounce mark on Tuesday (May 15), closing at US$1,290.30 that day.

Investors may be feeling shaken, but according to regulatory filings acquired by Bloomberg, Paulson’s firm Paulson & Co. had 4.32 million shares in SPDR Gold Shares (ARCA:GLD), the world’s largest gold exchange-traded fund, as of March 31.

Paulson & Co. was in the news last year after Marcelo Kim, a partner at the firm, urged investors to protect themselves from major gold miners’ “dreadful” performance — he called for the formation of a council aimed at making gold-mining companies more accountable.

In March, Paulson & Co. returned capital to clients in an effort to “focus on [its] core expertise” after its assets shriveled to $9 billion, down from $38 billion in 2011, a source told Bloomberg.

Meanwhile, Dalio’s hedge fund Bridgewater Associates also remained steady in Q1 with 3.9 million shares in SPDR and 11.32 million shares in the iShares Gold Trust (ARCA:IAU).

Dalio is known for his bullish stance on gold, and said last year that there are enough geopolitical issues that investors should allow gold to account for 5 to 10 percent of their portfolio.

The filings reported by Bloomberg do not show the current positions held by Paulson & Co. and Bridgewater Associates, so it is possible they have increased or decreased since then.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.