Paulson Trimmed Stake in SPDR Gold as Soros Sold Barrick

  • Investors pulled $4.7 billion from SPDR Gold in fourth quarter
  • Money poured out of gold ETF in fourth quarter on Trumponomics

John Paulson.

Photographer: Rick Maiman/Bloomberg

Billionaire hedge-fund manager John Paulson trimmed his holding in the world’s biggest exchange-traded product backed by gold in the fourth quarter, when prices posted their worst quarterly loss since 2013.

At the end of December, Paulson & Co. owned 4.36 million shares of SPDR Gold Shares, a U.S. government filing showed. That compares with 4.8 million shares in the three months through September, when the firm kept its holdings unchanged from the prior quarter.

Paulson pared his holding as investors pulled $4.7 billion from SPDR Gold in the fourth quarter, the biggest redemption since June 2013. Billionaire investor Stanley Druckenmiller was among those hitting the exit, selling all his gold in November in a bet on stronger economic growth and rising rates, only to return to the metal in late December and January.

Gold has rebounded 7 percent this year, after slumping 13 percent in the fourth quarter. Investors pulled money in the fourth quarter amid optimism that Donald Trump’s policies would boost economic growth and spur inflation, bolstering the case for the Federal Reserve to raise interest rates. That positive economic outlook is shifting amid concerns Trump’s protectionist policies will overshadow his pro-growth agenda.

Soros Fund Management LLC sold its 2.85 million shares in Barrick Gold Corp. in the fourth quarter, when prices capped their second quarterly loss, a regulatory filing shows. The shares were valued at $50.5 million when they were reported in the third quarter filing. Barrick shares have rebounded 17 percent since the end of December.

Paulson started his foray into gold in early 2009, betting that prices would rise amid unprecedented monetary stimulus. Bullion climbed 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent. Prices slumped to a 10-month low in December after the central bank raised U.S. rates for the first time in a year.

Paulson uses the SPDR ETF to back his funds’ gold share classes, which offer holdings denominated in bullion for investors interested in decoupling their assets from the value of the dollar.

Armel Leslie, a spokesman of New York-based Paulson & Co. with Peppercomm, declined to comment when reached by e-mail.

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