Hedge Funds Shift Gold ETF Holdings

May 18th at 2:35pm by Tom Lydon

Hedge funds and prominent money managers have held onto their gold exchange traded fund positions, with some even raising their bullion exposure, over the first quarter, but market observers believe they are beginning to lighten their holdings.

According to recent regulatory filings, hedge fund manager John Paulson has maintained his 17  million share position in the SPDR Gold Shares (NYSEArca: GLD), reports Barani Krishnan for Reuters. [Chart of the Day: Gold and Silver ETFs]

Meanwhile, billionaire investor George Soros more than tripled his holdings in GLD to 319,550 shares, reports Debarati Roy for Bloomberg. Additionally, Eric Mindich’s Eton Park Capital also bought 739,117 shares.

After rising 11% in January, gold prices dipped in February and March, ending the quarter up almost 7%. Gold, though, has continued to experience weakness, dropping down more than 1% so far this year. Consequently, some analysts expect hedge funds to start trimming their holdings over the second quarter.

“There’s absolutely no question in my mind that large institutions have been net sellers in gold over the past two weeks,” Adam Sarhan at Sarhan Capital said in the Reuters article. “The fact that Paulson has been coming under a lot of pressure on his other holdings may force him to liquidate as well.”

According to Bloomberg data, hedge fund holdings in GLD dropped $190.1 million last quarter to $6.35 billion.

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For more information on gold, visit our gold category.

Max Chen contributed to this article.

Full disclosure: Tom Lydon’s clients own GLD.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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