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Paulson adds to gold pile for first time since 2009

Source : REUTERS
Last Updated: Tue, Aug 14, 2012 22:40 hrs

* Paulson increases SPDR Gold Trust by 26.1 pct in Q2

* Gambit results in paper gain of over $580 million

* Soros more than doubled gold ETF stake

By Frank Tang

NEW YORK, Aug 14 (Reuters) - Prominent hedge fund manager John Paulson raised his stake in gold in the second quarter of 2012, boosting investor confidence that bullion prices have more room to rise this year, a U.S. regulatory filing showed on Tuesday.

It was the first time Paulson & Co had increased its position in the SPDR Gold Trust since the first quarter of 2009, when the investment firm initially acquired 31.5 million shares of the world's No. 1 exchange-traded fund.

"The fact that you have one guy who made the most money in his gold fund is increasing his holding, you have to feel confident about that if you are a gold bull," said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.

Turnout from other major fund managers with positions in the gold ETF was mixed. While billionaire financier George Soros more than doubled his shares in the ETF, Eton Park Capital's Eric Mindich had dissolved his stake by the end of the second quarter.

At the end of the first quarter, Eton Park was the second-largest shareholder of SPDR Gold after Paulson with more than $1.5 billion worth of call options and common shares.

Paulson & Co owned 21.8 million shares in SPDR Gold by the end of June, up about 26 percent from 17.3 million shares from March 31, a regulatory filing with the U.S. Securities & Exchange Commission showed.

The gamble resulted in a paper gain of nearly $583 million for the company as the value of its ETF holdings rose to $3.39 billion from $2.81 billion.

Spot gold fell 4 percent in the second quarter, as prices largely traded in a $150 range after a gain of about 7 percent in the first quarter.

Disappointment over a lack of more stimulus by the U.S. Federal Reserve and other central banks has weighed heavily on gold, a traditional inflation hedge.




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