Gold prices have been inconsistent with reacting with key drivers that support moves in either direction. Nevertheless, traders still remain slight bullish on worries that the US economy, and the global economic outlook, is shaky. According to trading data, money managers are betting on gold rally with net-longs increasing by 14 percent to 102,895 futures and options as of May 6. This was the highest jump since February.
“Some people came back to gold betting against an improving US economy, and then the Ukraine crisis also attracted some investors,” said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management. And billionaire money manager John Paulson seems to still be bullish on the precious metal after seeing his gold fund decimated last year by the 28 percent decline in the metal and massive investor redemption.
Paulson & Co. still remains the largest shareholder of the SPDR Gold Trust (GLD) at 10.23 million shares as of March 31, which the regulatory filings show no change for the third straight quarter. Paulson is a big advocator for gold since the Federal Reserve began their money printing quest to prosperity.
George Soros’ Soros Fund Management LLC boosted their stake in Barrick Gold Corp in the first quarter. The fund also scooped up more shares of Market Vectors Gold Miners ETP, according to regulatory filings.
Gold prices have meandered between $1,285 and $1,310 for the last few months, even as mixed data and geopolitical risk rises across the globe. Prices have not really budged during the speculation that the European Central Bank (ECB) would begin more lax monetary policies. However, these hedge fund giants are not giving up the one asset that is likely to become a clear hedge for central bank policy.