Gold Play
Soros splits with Chinese housewives on gold
May 16, 2013, 5:06 AM
So in addition to that cutting-Apple, raising-Google action, it seems billionaire investor George Soros was increasingly uncomfortable with gold in the first quarter, according to 13-F filings released on Wednesday.
Soros is known for stealth movements that have earned him a lot in the past, such as $1.1 billion on a short of the British pound back in 1992. So it seems that ahead of the bear market that dug its claws into gold mid-April, Soros Fund Management cut its stake in the SPDR Gold Trust ETF GLD+0.25%to 530,900 from 600,000 in the prior 3-month period. (See, Soros talking ‘gold destroyed” last month)
But as others point out, Soros hardly made the biggest moves out of gold. Funds run by Northern Trust and BlackRock cut their exposure to the SPDR ETF by more than half, while John Paulson’s Paulson & Co. held its 21.8 million-share stake and Schroder Investment Management bought 2.1 million.
Gold, in desperate need of some good news, found a defender in the World Gold Council on Wednesday. Fresh data showed total ETF gold holdings were still higher than they were a year ago — up 2%. ETFs represented about 6% of total gold demand in 2012. And that, said Jason Toussaint, chief executive officer of World Gold Trust Services, a subsidiary of the WGC and the sponsor of the SPDR Gold Trust, means ETFs are just a small part of the gold investment story.
Demand for jewelry, bars and coins did nicely, the WGC points out. Jewelry demand from China rose 19% to a record 185 metric tons (Chinese housewives played a role here, say some), while that from India rose 15% and U.S. demand showed the first increase in demand for gold jewelry in seven years. Year-on-year bar and coin sales rose 22% in China, 52% in India and 43% in the United States. This means fundamentals for gold remain sound even despite that April selling, said Toussaint.
Over at MSN Money a day prior, Anthony Mirhaydari made a compelling argument in three charts as to why he thinks the gold selloff could be severly overdone and gold could rally 15% from here. Part of that he says is due to the fact that wages and housing costs, two structural inflation drivers are starting to move higher.
But at DailyForex.com, they are keeping a nervous eye on technical levels. If gold closes below $1,398 this week, it will suggest the bulls have run out of gas and “reinforce the idea that recent price action is more than a simple correction, they say.
Gold sank below that key $1,400 level on Wednesday, the lowest close in nearly four weeks as the U.S. dollar kept on trucking higher. That came as the ICE dollar index DXY+0.16% moved up to 83.848. On Thursday, gold sellers stepped it up in the early hours of Europe, with the metal down $26 to $1,369.80 an ounce. And the dollar index? 83.914.
– Barbara Kollmeyer
– Follow this reporter on @bkollmeyer
– Follow The Tell Blog on @thetellblog
https://blogs.marketwatch.com/thetell/2013/05/16/soros-splits-with-chinese-housewives-on-gold/
https://www.marketwatch.com/story/physical-gold-demand-shines-in-first-quarter-wgc-2013-05-16?dist=beforebell