Billionaire investors George Soros and Louis Moore Bacon increased their stakes in exchange-traded products backed by gold as prices jumped the most in more than two years. John Paulson maintained his holding in the biggest bullion-backed ETP as Paul Touradji sold his stake.
Soros Fund Management boosted its investment in the SPDR Gold Trust, the biggest fund backed by the metal, by 49 percent to 1.32 million shares as of Sept. 30 from three months earlier, a U.S. Securities and Exchange Commission filing for third-quarter holdings showed yesterday. Paulson & Co., the largest investor in the ETP, kept its stake at 21.8 million shares. Bacon’s Moore Capital Management LP acquired 1.8 million shares in Sprott Physical Gold Trust last quarter.
Prices rose 11 percent in the third quarter, the most since 2010, as countries from the U.S. to China announced measures to fuel growth, boosting the appeal of gold as an inflation hedge. Global ETP holdings reached a record 2,596.1 metric tons on Nov. 8 amid speculation that stimulus efforts will increase as the U.S. faces a so-called fiscal cliff of $607 billion in tax gains and spending cuts next year should Congress fail to act.
“The third quarter was all about buying gold because of stimulus measures,” Michael Gayed, chief investment strategist at New York-based Pension Partners LLC, which advises on more than $150 million in assets, said in a telephone interview. “Many investors will continue to move to gold because of the uncertainties surrounding the fiscal cliff.”
While buying shares in the Sprott Physical Gold Trust, Moore Capital cut holdings in the SPDR Gold fund by 20,000 shares to 100,000 last quarter. Patrick Clifford, a spokesman for New York-based Moore, declined to comment on the filing. Michael Vachon, a spokesman for Soros, did not reply to an e-mail sent by Bloomberg.
Paulson, who became a billionaire in 2007 by wagering against the subprime mortgage market, owns about 5 percent of the SPDR Gold Trust, according to data compiled by Bloomberg. His New York-based firm cut its holding in Gold Fields Ltd. by 64 percent to 6.5 million shares and reduced its stake in Anglogold Ashanti Ltd. by 13 percent to 28.4 million shares in the quarter, a filing showed today.
Scout Capital Management LLC boosted holdings in the SPDR Gold Trust by 525,000 shares to 1.14 million shares, a filing showed yesterday.
Touradji Capital Management LP, founded by Paul Touradji, sold its entire stake of 82,000 shares of the SPDR Gold Trust. Lone Pine Capital LLC, the hedge fund run by Stephen Mandel Jr., cut its holding 31 percent to 2.587 million shares, and Third Point LLC lowered its holding by 10 percent to 130,000 shares.
Gold prices in New York have climbed 9.7 percent this year, heading for a 12th annual gain. The metal is up more than sixfold since the end of 2000 as volatility in equity markets and declining currencies boosted demand for bullion as an alternative asset. The December-delivery contract traded at $1,718.70 an ounce by 8:21 a.m. local time on the Comex.
“The next few months will be very good for gold because of all the uncertainties in the world,” said Tom Winmill, who helps manage $200 million of assets in Walpole, New Hampshire, for Midas Funds. “Until there is any decision on the fiscal cliff, people will want to move to a hard asset like gold.”
Money managers who oversee more than $100 million in equities must file a Form 13F with the SEC within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.