Price Manipulation Won’t Stop Gold Bull, Hedge Fund Guru Say
Top hedge fund manager Eric Sprott is strong on gold. In a new research paper, he punctures the myth that gold’s heyday has passed. Price suppression has reached its limits, he argues, and the dynamics of a tight supply will inevitably drive the price of gold upwards.
The nominal price of gold has fallen this year. From peaks near $1,900 per ounce, gold currently trades around $1,200 to $1,300. Enthusiastic predictions of $5,000 per ounce gold have morphed rapidly into $700 per ounce prognostications.
Mega-investor George Soros is one of the voices who has publicly run down the price of gold. Yet the Soros Fund has not followed suit. While retaining existing positions in gold mining funds, the fund added $25.4 million of call options on the GDXJ Junior Gold Miners Index and another 1.1 million shares of GDX, a gold miners ETF, during the second quarter of 2013. All told, the Soros Fund comprises $239,200,000 in gold investments—hardly a liquidation of gold positions. Reports that Soros’ gold position declined stemmed from a decrease in holdings in the GLD gold ETF. But even there, Soros did not sell these holdings. As a major institutional investor, he enjoys a position on par with major bullion and central banks that entitles him to redeem gold ETF shares for the physical gold. So, rather than liquidate theContinue Reading →
Hedge fund manager Eric Sprott sees behind-the-scenes market manipulation at work—all-out last efforts to push gold prices down that have done their worst, leaving gold poised to resume its run.