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Paulson Tells Clients Central Bank Purchases to Back Gold

John Paulson, the hedge-fund manager who’s lost money this year after a 16 percent decline in gold, told clients that purchases by central banks and demand in Asia will support the metal in the near term.

“Although inflation and inflation expectations remain subdued, which appears to have dampened the appetite for gold so far this year, we believe that ongoing central bank purchases and strong gold demand from China and India will help support the gold price in the near-term,” Paulson & Co. said in a letter to clients that was obtained by Bloomberg News.