Soros, Paulson still love gold

The legendary investors retained large holdings in gold ETFs and gold stocks in the third quarter.

By TheStreet Staff Nov 16, 2010 12:51PM

more investment and finance news from thestreet© Stockbyte/SuperStockBy Alix Steel, TheStreet


John Paulson and George Soros are still big believers in gold but sidestep silver, according to recent 13F filings for the third quarter.


As gold prices hurdled to new highs in the investing period from July through September, legendary investor Paulson retained his position as the No. 1 holder of the SPDR Gold Shares (GLD) exchange-traded fund, with 31.5 million shares. Soros, on the other hand, dumped 547,689 shares of the GLD, reducing his position to 4.7 million shares, making him the eighth-largest holder.


Although Soros made headlines this year by saying that gold is the "ultimate asset bubble," he still believes in the precious metal. Soros initiated a new position of 5 million shares in the iShares Gold Trust (IAU), making him the fifth-largest holder.


IAU attracted a variety of investors recently when it lowered its expense ratio from 0.4% basis points, which is how much it costs to buy shares of the GLD, to 0.25%, making it the cheapest gold ETF. BlackRock is the biggest holder, with 12.3 million shares, and added a modest 230 shares in the past quarter.

JPMorgan (JPM) was the second-biggest buyer of the IAU, adding 3.8 million shares and bringing its total holdings to 3.9 million. JPMorgan didn't stop there. The large investment bank, custodian of the GLD, was the biggest buyer of the GLD, adding 5.47 million shares, for a total of 10.3 million and making it the third-largest investor behind Paulson and Northern Trust.


The gold ETFs lost some big names as well, with Eton Park Capital Management reducing its holdings by 2 million shares and Royal Bank of Scotland closing out its position of IAU.


Silver, often dubbed the poor man's gold, rallied 18% in the third quarter, which spurred investor interest in the physically backed ETFs. Bank of America (BAC) added 4.6 million shares of the iShares Silver Trust (SLV), making it the biggest buyer and holder, with 12.3 million shares. Selling of the SLV was relatively minor.


Goldman Sachs (GS), on the other hand, reduced its gold and silver holdings, selling 129,180 shares of the ETFS Physical Silver Shares (SIVR) and 116,771 shares of the ETFS Physical Gold Shares (SGOL).


As gold prices glittered, so did gold mining stocks. Paulson kept his positions unchanged in Kinross Gold (KGC), Gold Fields (GFI), NovaGold (NG), Randgold Resources (GOLD) and Iamgold (IAG). He did dump 2.7 million shares of AngloGold Ashanti (AU) but is still the largest holder, with 41 million shares. The stock rallied almost 9% in the third quarter.


Soros was more active in trading gold stocks. Soros sold shares of Kinross, Newmont Mining (NEM) and Market Vectors Gold Miners (GDX), a basket of large gold stocks, but initiated a position in Teck Resources (TCK) and New Gold (NGD) and added to his position in Great Basin Gold (GBG). Soros retained his positions in NovaGold, Seabridge Gold (SA) and Gammon Gold (GRS).


Teck Resources owns 50% of one of NovaGold's big projects, Galore Creek. There has been speculation recently that the junior gold miner could be in the market for a buyer and that Teck Resources or Barrick Gold (ABX), which owns 50% of NovaGold's other big project, Donlin Creek, could be potential bidders.


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Nov 20, 2010 1:34AM
Soros made his big money sinking countries curriencies. He has caused more misery in the world than most dictators.
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