Gold bull Paulson cuts SPDR stake by half amid bear market

Paulson Commitment

At an investor conference on July 17, Paulson affirmed a commitment to investing in the metal and stocks of producers to hedge against currency debasement as central banks pump money into economies. The firm didn’t provide additional comment yesterday on its SPDR stake. The hedge fund made $15 billion for investors in 2007 by betting against subprime mortgages before the housing collapse.

Paulson sold call options to buy 360,000 shares in Toronto- based Barrick, the biggest gold producer.

In the second quarter, Soros Fund Management LLC sold 530,900 SPDR shares, along with its entire stake of 2.67 million shares of the Market Vectors Gold Miners ETF. Loeb’s Third Point LLC sold 130,000 SPDR shares.

Michael Vachon, a spokesman for Soros, could not be reached by telephone at his office after regular business hours. Elissa Doyle, a spokeswoman for Third Point, declined to comment on the holdings. The hedge funds are based in New York.

Stocks, Bonds

Gold is heading for the biggest annual loss since 1997. In 2013, the MSCI All-Country World Index of equities has climbed 10%, and the Bloomberg Dollar Index gained 3.5%. The Standard & Poor’s GSCI Spot Index of 24 raw materials has advanced 0.3%, and the Bloomberg U.S. Treasury Bond Index declined 3.1%.

The value of global gold ETPs has plummeted by $56.1 billion this year.

Gold probably won’t see any “lasting gains” until investors stop selling ETP holdings, Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said on Aug. 8.

The metal jumped 70% from the end of 2008 through June 2011 as the Fed bought more than $2 trillion of debt. Fed Chairman Ben S. Bernanke is contemplating how to finish a third round of so-called quantitative easing that has swelled the central bank’s balance sheet to a record $3.59 trillion.

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