Northern, WI 8/16/2011 (PennyPayDay) – The largest gold fund players including hedge fund titan John Paulson stuck with their bullion bets in the second quarter, opting not to follow George Soros who further reduced his gold ETF holdings.Famed gold bull Paulson held his ground with his $4.6 billion stake in the large gold exchange-traded fund SPDR Gold Trust in the second quarter, according to 13-F filings with the U.S. Securities and Exchange Commission that provide the best insight into where hedge funds are placing their bets.
Eric Mindich's Eton Park Capital slashed his shares in SPDR Gold Trust to 813,000 in the second quarter from 2.3 million in the previous quarter. However, the firm raised his stake in the gold ETF's call options to 8.7 million shares from 6 million shares during the quarter.
Others including billionaire financier George Soros and activist investor Barry Rosenstein's Jana Partners trimmed their holdings in gold as bullion extended its rally to a record 11th quarter in Q2.
Paul Touradji, who runs one of the world's largest commodities-oriented hedge funds, sold his entire stake of SPDR Gold Trust worth about $25 million during the quarter.
Gold prices barely reacted to the news, with spot gold up 0.3 percent at $1,769.71 an ounce by 6:29 p.m. EDT.
"Paulson basically is putting his money where his mouth is. He believes that gold is earmarked to move substantially higher," said Mark Luschini, chief investment strategist at Janney Montgomery Scott, which manages $54 billion in assets.
"With the Fed saying it is likely to keep interest rates low for a couple more years, it is basically advertising to the market that ... we are going to maintain a highly accommodative monetary policy which is a dollar-debasing position" that usually benefits gold, Luschini said.
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