Despite lackluster gold prices, prominent investors such as Soros are holding their bet that gold and gold stock will rise again. In the face of increased money printing by Federal Reserve, Gold has dropped significantly and inflated the stock markets. George Soros is hedging against an economic slowdown by going long on Barrick Gold Corporation.
In financial markets, Soros is renowned as a mythical figure. After spending his early years escaping the Nazi Germany, he landed in London where he studied philosophy. After he completed his Ph.D. thesis at London School of Economics, he could not find work. Eventfully, George Soros paved his into financial markets and created a legendary investment career.
In 1970, Soros set up his own fund where he built reputable relationships with investors and made for them tons of money. In 1992, he took $10 billion bet against single currency, George Soros turned out to be right and made $1 billion profit from a single day trade and by the end of the transaction, and he had made more than $2 billion profit. Since then his notoriety grew exponentially and earned him the title “The Man Who Broke the Bank of England”.
Since peaking in mid-2011, the gold price has plummeted by more than 40%. Now the price hovers around $1.118 per Ounce, this is considered as dangerously low price for gold miners on http://www.forbes.com/sites/adamsarhan/2016/05/17/george-soros-sells-stocks-buys-more-gold-why-investors-should-care/#424edb785c39. As a result, many smaller miners will be wiped out during the price slump. Finally, it will lead to supply contractions that will spark resurgence in gold. Billionaires, among them George Soros are aware of that.
According to the 13F filings, it is revealed that Soros Fund Management continues holding its $13.5 million stakes in Market Vectors Gold Miners EFT, an EFT that focuses on gold industry. George Soros bought 1.9 million shares of Barrick Gold, valued at $20.1 million and 1.05 million shares in SPDR Gold Trust, a firm that tracks the price of gold. Moreover, Soros has cut his U.S stocks by 37 percent to 3.5 billion.
Soros built his $24 billion fortune through markets speculations, earlier this year he warned of risks from China economy. According to Soros, China, debt- fueled economy resembles the U.S 2007-2008 financial crises. He explained that China hard landing was practically impossible, and it will worsen global deflationary pressures, drag down stocks, spur a global recession, and boost U.S government bonds. Read more on NYTimes.com.
Soros is not alone, a billionaire investor Stan Druckenmiller also reading from the same page. Earlier this month he stated that gold is his largest currency allocations. Others investors have followed the suits, and it explains why in the first three months of the year Gold for immediate delivery jumped 16 percent. It is the biggest quarterly surge since 1986.