Skip to main content

Paulson Lets Gold Bet Ride

John Paulson maintained his big position in gold in the fourth quarter, while other big investors like George Soros added to their positions.
  • Author:
  • Publish date:



) --

John Paulson

let his big bet on gold ride in the fourth quarter, moderately adding to his sizable position in the precious metal as



Paulson, who famously bet correctly that the housing bubble was about to burst in 2008, retained Paulson & Co.'s position as the largest holder of

SPDR Gold Shares

(GLD) - Get SPDR Gold Shares Report

with 31.5 million shares valued at $3.45 billion. Paulson did not add to his position in the fourth quarter, but it remains 17% of the portfolio, the fund's largest position.

SPDR Gold Shares is popular among investors who believe in higher gold prices because the ETF tracks gold's spot price. Mining stocks can have as much as 3 to 1 leverage to prices, but the GLD typically gives an investor more stability without as much leverage.

George Soros


tripled his gold holdings

in SPDR Gold Shares from 2.5 million shares to 6.2 million shares as gold prices hit an all-time high of $1,227 an ounce. In his most recent form 13F-HR filed with the SEC for the fourth quarter of 2009, Soros reportedly became the fourth largest owner of the SPDR Gold Shares, but still a far cry from Paulson.

TheStreet Recommends

Paulson also owns 42 million shares of

AngloGold Ashanti

(AU) - Get AngloGold Ashanti Ltd. Report

, 8.69% of the portfolio. AngloGold is one of the last remaining large-cap miners to have hedges which can limit leverage to rising gold prices.

Paulson did make relatively small additions to gold miners

Gold Fields

(GFI) - Get Gold Fields Ltd. Report


Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

, adding 550,000 and 719,200 shares, respectively about 2.35% increases. This is compared to a 1,925% increase to his

SunTrust Bank

(STT) - Get State Street Corporation Report

position and an addition of 200 million shares of


(C) - Get Citigroup Inc. Report


Gold prices need strong investment demand

to offset a weakening global market for jewelry. The World Gold Council said investment demand rose 7% in 2009, making it the only subsector to support growth while jewelry demand tumbled 20%. ETF demand was 85% higher than in 2008 due to investors like Paulson and Soros making sizable bets on the precious metal.

Paulson and Soros are just two of a number of big names

investing in gold


David Einhorn

, president of Greenlight Capital, has previously said that gold will do well as the currency crisis escalates and that prices will head higher unless Washington executes monetary restraint. Einhorn said in an interview with

The Wall Street Journal

that his hedge fund owns a massive amount of physical gold stored near Times Square. Einhorn also likes mining companies.

Market Vectors Gold Miners ETF

(GDX) - Get VanEck Gold Miners ETF Report

, a basket of large-cap miners, makes up about 5.03% of his portfolio, although his position was unchanged in the fourth quarter.

While big investors like Paulson, Soros, Einhorn and Jim Rogers are bullish on gold in the long-term, there have been some short-term setbacks. Paulson's new gold-focused hedge fund has lost 14% since opening for investors last month, according to

Bloomberg BusinessWeek


>>Slideshow: How to Invest in Gold

>>More stories on gold investing


Written by Alix Steel in New York


Alix joined TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.