Paulson Will Not Add Any More Gold to Fund

by on November 22, 2013 9:08 am GMT

Hedge fund billionaire John Paulson told his clients that no more gold will be added to his gold fund. This coming just a few weeks after he expressed his bullishness for the precious metal. The reason: Paulson does not know if inflation, the driving force behind gold, will increase or not.

The PFR Gold Fund has lost a whopping 63 percent year-to-date and a decline of 1.2 percent in October and 19 percent in September. The primary contains the personal money of John Paulson.

Paulson first became famous after he made billions shorting sub-prime mortgages in 2007. However, since than, he has made questionable losing trades against Bank of America, Citigroup and others.

The 4H Chart shows gold’s consolidation at the bottom of the range created by the selloff post-FOMC. The precious metal was able to make a small pullback but has failed to make a significant move as sentiment is mixed and the outlook for gold is in question.

4H Chart of GC

4H Chart of GC

The trend is still down, and rallies are continued to be sold. The daily RSI is 31, just under oversold territory. The ADX trend strength is very strong at 62 and continuing to float higher, and the -DMI is 29 but start to flatline.

Another small pullback can happen, with a resistance of $1,250.2 per ounce and at the 20 EMA at $1,255 per ounce.