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Paulson Sells Gold ETF – Buys Physical Bullion? Soros Not Gold Bearish

Tyler Durden's picture





 

From Gold Core

Paulson Sells Gold ETF – Buys Physical Bullion? Soros Not Gold Bearish

Gold is trading at USD 1,768.20, EUR 1,305.30, GBP 1,113.30, CHF 1,620.20 , JPY 136,076  and CNY 11,223 per ounce.

Gold’s London AM fix this morning was USD 1,765.00, GBP 1,113.99, and EUR 1,302.39 per ounce.

Yesterday's AM fix was USD 1,780.50, GBP 1,115.29, and EUR 1,299.06 per ounce.


 
Gold has fallen 0.6% in US dollars to $1,768/oz but is flat in the beleaguered euro at €1,306/oz. Volatility and sell offs in equity and European bond markets appears to be contributing to gold’s failure to rise through the $1,800 level. Europe's ability to tackle its growing debt crisis is in serious doubt which is leading to renewed risk off sentiment and short term gold weakness.

Gold will be supported by its proven safe haven status, but is prone to short term weakness due to sell offs in the wider financial markets. Sentiment remains very fragile which will lead to continuing safe haven demand which shall support gold in the medium and long term. Especially as the official policy response is inflation and the currency debasement.

The gold ETF SEC filings were released overnight and make for interesting reading.

Known Gold Holdings by Exchange Traded Funds/ Trusts Worldwide

Paulson & Co., the hedge fund founded by billionaire John Paulson, cut its stake in the SPDR Gold Trust to 20.3 million shares in the third quarter from 31.5 million as of June 30. The firm remained the largest holder.

Paulson & Co.  sold a third of the their SPDR holding which is quite a large liquidation. However, Paulson remains bullish on gold as was seen in positive comments he made recently so it would seem likely that this sale may have been an effort to raise cash after his fund suffered sharp losses in the last quarter. Some hedge funds sold the ETF to cover losses during a rout that erased $7.8 trillion from the value of global equities since May.

Given Paulson’s expressed bullishness on gold, his fund may have opted for allocated accounts as was done by David Einhorn.

The SEC filings also show that billionaire investor George Soros increased his stake in the SPDR Gold Trust. Soros’ gold ETF sale was latched onto by gold bears and some advisers to warn that gold was a risky bubble.

Soros Fund Management LLC held 48,350 in the SPDR Gold Trust as of Sept. 30, compared with 42,800 shares at the end of the second quarter.

The increase in Soros gold holdings are meager at some $10 million worth but suggest that Soros is not as bearish on gold as the multitude of news headlines, regarding his comments regarding gold being “the ultimate asset bubble”, would suggest.

Soros added 145,000 call options and 120,000 puts in SPDR Gold in the third quarter. This confirms that Soros is not as bearish on gold as some would have us believe.

There is also the real possibility that Soros’ fund, like other hedge funds, may have opted to own allocated bullion rather than a gold trust. Some hedge funds have opted for allocated gold bullion due to it being more discreet with a lack of disclosure (no quarterly filings), due to the lower long term costs and due to allocated accounts having less counter party risk than a trust with many indemnifications.

Steven Cohen’s SAC Capital Advisors LP and New York- based Touradji Capital Management LP established gold positions in the third quarter. SAC Capital, which manages $14 billion and is based in Stamford, Connecticut, held 184,601 shares in the SPDR Gold Trust as of Sept. 30. Paul Touradji had 45,000 shares compared with none on June 30, the filings show.

Total holdings in exchange-traded products backed by gold reached a record 2,330 metric tons on Aug. 18 and stood at 2,312.3 tons yesterday.

Many hedge funds are likely increasing allocations to gold but are opting to do it through safer means, such as allocated accounts, rather than the gold trusts.

This has important implications for the gold market as it means that some of the allocations of the massively powerful hedge fund industry to gold may not be realized or accounted for.

The Paulson redemptions also show up the ridiculous notion that selling by any one individual or institution, no matter how large or wealthy, could bring an end to gold’s bull market today.

In other gold news, Venezuelan Central Bank President Nelson Merentes said his country will receive its first gold shipment within 15 days as part of President Hugo Chavez’s decision to repatriate its gold reserves held abroad.

“Tomorrow we sign the contract and we’ll have the first shipment of our gold in the country within 15 days,” Merentes said at an event with Chavez broadcast on state television.

For breaking news and commentary on financial markets and gold, follow us on Twitter

NEWS

(Reuters) --  Gold flat; euro zone debt fear resurface
http://www.reuters.com/article/2011/11/15/markets-precious-idUSL3E7MF015...

(Bloomberg) -- Soros Increases Position in SPDR Gold Trust Holdings
http://www.businessweek.com/news/2011-11-15/soros-increases-position-in-...

(Bloomberg) -- Gold May Decline for Second Day as John Paulson Reduces Bets, Euro Weakens
http://www.bloomberg.com/news/2011-11-15/gold-may-decline-for-second-day...

(MarketWatch) -- Gold ends lower on lack of safe-haven flows http://www.marketwatch.com/story/gold-futures-gain-in-electronic-trading...

COMMENTARY

(ZeroHedge) -- Ron Paul: "Estimated That US Banks Have Over A Trillion Dollars Tied Up At-Risk With German & French Banks"
http://www.zerohedge.com/news/ron-paul-it-estimated-us-banks-have-over-t...

(ZeroHedge) -- Energy Independence - The Big Lie
http://www.zerohedge.com/news/guest-post-energy-independence-big-lie

(KWN) -- Martin Armstrong - Gold Upside Take Off Only Months Away
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/14_M...

(YouTube) -- Marc Faber 'Problems Postponed for While'
http://www.youtube.com/GoldCoreLimited

(YouTube) -- Jim Rogers: World Economy Needs A Reboot
http://www.youtube.com/GoldCoreLimited

 


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Tue, 11/15/2011 - 09:07 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Soros is Satan's little helper....

Tue, 11/15/2011 - 09:21 | Link to Comment Carlyle Groupie
Tue, 11/15/2011 - 09:13 | Link to Comment cossack55
cossack55's picture

So, can you eat paper gold? Does it taste better? I assume it is easier to use on the other end.

Tue, 11/15/2011 - 10:15 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Each US Paper note when burned will produce 12.44 BTU. During the Weimar Republic era Germans discovered it cost less to burn Marks than Firewood.

Tue, 11/15/2011 - 10:39 | Link to Comment Ura Bonehead
Ura Bonehead's picture

Actually, it's probably easier to eat the paper (and better for you) than a pile of physical gold.  And it makes for a nice fire.  Regardless, if it gets to that point there won't be any physical as the Gov will have already taken it all.

Tue, 11/15/2011 - 09:13 | Link to Comment PaperBear
PaperBear's picture

Goerge Soros and his comments regarding gold being “the ultimate asset bubble" can be interpreted to mean that there must always be at least ONE ASSET to outlast all other asset bubbles and that is the precious metals.

Keep stacking silver and read 'Jeff Nielson Interview with Charles Savoie'
http://sgtreport.com/2011/11/interview-with-charles-savoie/

“vast body of research which he has titled “The Silver Stealers”.”
Vast is correct, I have never seen an internet document so vast.
At the time I have sent you this email I am up to the 10th anglophile conspirator Morris K. Jesup of the silver stealers document and already my blood is boiling. It will take me days to, bit by bit, read this document in full.
"A Secret Society gradually absorbing the wealth of the world."
"THE NEXT 200 YEARS ... THE SEIZURE OF THE WEALTH NECESSARY"
"Britain’s attack on the world’s silver money system, starting in India in 1926 with the decision of the Royal Commission on Indian Currency"
"crushing of the Hunt/Arab silver play in January 1980; to today’s mortgage crisis; forcing the middle class into apartments (feudalism); exportation of industry and jobs"
"Brittain founded the Commonwealth Press Union in 1909 for managed news control"
"Demonetization of silver by England was originally worked by a few powerful financiers who saw an opportunity to more than double the value of their personal fortunes if silver could be demonetized in England, Germany and the United States."
"the most powerful system of propaganda ever organized was put in operation."
"WRECK THE WORLD IF THEY COULD DOUBLE THEIR PRIVATE FORTUNES."
"The effect on India and China will never be known in their fullest horror."
"Prostitute historians who’ve received grants and fellowships from the Money Power are intentionally silent on such matters."
"Britain’s opium bank for China that sucked countless thousands of tons of silver out of the Far East"
"closed the Indian mints to the free coinage of silver as of June 26, 1893."
"justifying their looting of China by making millions of Chinese drug addicts."
"By the 1880’s, opium was one of the most valuable commodities in international trade."
"The reason Britain did not invade America when Andrew Jackson shut down the second United States Bank, as it had done in response to President Madison’s closure of the first United States Bank in 1811 with the War of 1812, was because Britain deemed it lacked resources to invade both nations; that their opium business was more profitable"
 
For those who do not know who Andrew Jackson was, he was the seventh President of the United States (1829–1837).
 
We are taking part in the Internet Reformation and we must all hold fast to the faith and our will and this conspiracy will fail.

Tue, 11/15/2011 - 15:04 | Link to Comment PaperBear
PaperBear's picture

"1776:  Adam Weishaupt officially completes his organisation of the Illuminati on May 1 of this year."

A coincidence that we had a smack down of silver starting May 1st 2011 ?

Tue, 11/15/2011 - 15:20 | Link to Comment PaperBear
PaperBear's picture

"the family was to intermarry with it’s first and second cousins to preserve the family fortune (of the 18 marriages by Mayer Amschel Rothschild’s grandchildren, 16 were between first cousins - a practice known today as inbreeding)"

Won't such inbreeding bring about genetic problems ?

Tue, 11/15/2011 - 15:21 | Link to Comment PaperBear
PaperBear's picture

"no public inventory of his estate was to be published; no legal action was to be taken with regard to the value of the inheritance"

A trick the rest of us surely could not pull off.

Tue, 11/15/2011 - 15:25 | Link to Comment PaperBear
PaperBear's picture

"1815: The five Rothschild brothers work to supply gold to both Wellington's army (through Nathan in England) and Napoleon's army (through Jacob in France), and begin their policy of funding both sides in wars. The Rothschilds love wars because they are massive generators of risk free debt."

The war is good for business (and bad for taxpayers) ethos begins.

Tue, 11/15/2011 - 09:19 | Link to Comment Yellowhoard
Yellowhoard's picture

How does one know that his allocated gold is indeed allocated?

With John Corzine still walking the streets, it seems that the government does not care if firms comingle customer funds with house funds.

 

Tue, 11/15/2011 - 09:49 | Link to Comment Pladizow
Pladizow's picture

Easy, allocate it between your left and right hand!

Tue, 11/15/2011 - 10:18 | Link to Comment Long-John-Silver
Long-John-Silver's picture

I prefer it between my feet. My Gold hoard is now too heavy to hold it all in my hands.

Tue, 11/15/2011 - 09:22 | Link to Comment George Huxley
George Huxley's picture

I wonder if Chavez will really get his gold. Iran & Isreal heating up with Iran blaming Isreal for bombings. Israeli defence minister saying, "there may be more such explosions."

 

Tue, 11/15/2011 - 09:22 | Link to Comment Irish66
Irish66's picture

Fed opened window to Europe??

Tue, 11/15/2011 - 09:26 | Link to Comment bernorange
bernorange's picture

Maybe Paulson read Jeff Nielson's warning about Dilution Day and decided it was time to get the real deal.

www.pmbug.com

Tue, 11/15/2011 - 09:29 | Link to Comment Mercury
Mercury's picture

I suppose someone has to be the top holder of GLD but seeing a single, flavor-of-the-month hedge fund manager firmly entrenched in the top spot is a little alarming if you're long the thing.

Tue, 11/15/2011 - 09:41 | Link to Comment s2man
s2man's picture

Perhaps he is hedging against inflation.  Or, getting ready to ride the biggest, baddest bubble of all time.

Tue, 11/15/2011 - 09:28 | Link to Comment mogul rider
mogul rider's picture

 

Armstrong in June I think in a memo said Paulson would get bent over in his gold holdings by the evil empire.

 

Boy did he ever.

Good call Martin.

Nothing like a bitch slap to remind you who runs the show.

Tue, 11/15/2011 - 10:02 | Link to Comment High Plains Drifter
High Plains Drifter's picture

i think they want some of kyle bass too.   they are gunning for him, waiting for him to step on his dick....

Tue, 11/15/2011 - 10:38 | Link to Comment oddjob
oddjob's picture

I suspect you know exactly how that feels.

Tue, 11/15/2011 - 10:22 | Link to Comment Potemkin Villag...
Potemkin Village Idiot's picture

That article (and Krugman's assumptions) are the biggest load of horseshit I've ever seen...

Contained within Krugman's own chart is enough to call the entire reasoning in to question...

http://graphics8.nytimes.com/images/2011/10/07/opinion/100711krugman3/100711krugman3-blog480.jpg

Commodity prices (in 2008) were levered up to the bejezzus and thus took a liquidative hit during the Lehman crisis... The real comparison should start around the March 2009 timeframe... Commodity prices have doubled (from the 50 baseline to 100 (but on the chart it looks like it's back to nothing)... The monetary base increased by less of a percentage since that time (50%, or from a 200 baseline to a 300 baseline)...

IOW... Call me in 10 years if you want to continue to use that logic to say Friedman was wrong...

 

Tue, 11/15/2011 - 09:29 | Link to Comment mogul rider
mogul rider's picture

1580 - 1805 is a good run.

 

take your profits for now.

Tue, 11/15/2011 - 09:34 | Link to Comment Negro Primero
Negro Primero's picture

...from UBS:

 Precious Metals Daily: 15/11/11: Q3 Gold ETF Activity Enlightens

 

The 13f filings of GLD, the largest gold ETF, shows that some investors were active sellers in Q3. GLD daily activity shows three distinct periods when ETF selling was significant: Aug. 9-12, when 1.6 moz of gold was liquidated, Aug. 22-24, when 1.87 moz was sold, and Sept 26-29, when 652 koz flowed out. These liquidations help explain the highly volatile and often-confusing gold price moves of in the quarter, particularly in its second half.

 

Some market participants may take today's news in a positive light: despite this GLD selling, which was much-discussed in the market at the time, the gold price actually held up quite well. Others might take the news as negative, concerned that liquidations may have occurred elsewhere: after all, Comex net longs fell dramatically in September. Yet with ETF holdings followed daily and the CFTC data pulled apart every week, it is only the identity of the investors which is news in the 13f filings. So far, however, gold is in negative territory for the day, but by a small margin.

 

Why was there this heavy selling of the GLD fund in Q3?  A simple explanation is natural profit-taking: at the time of the Aug. 22-24 redemptions, gold was trading close to $1900; banking some profits at record price levels makes perfect sense. Whether these positions will be bought back is another matter. There is also little doubt that at times during the quarter gold was a victim of its own success, with profit taken to cover losses elsewhere. Remember, however, that redemptions from ETFs don't always mean the outright liquidation of gold positions: in the past some investors have chosen to move to less-transparent ETFs or other types of gold exposure.

 

We think the ultimate market assessment will be the positive one we outline above: the gold has performed relatively well, high-profile investors have exited their ETF positions in the past without lasting impact on the price, and there were anyway more buyers than sellers of GLD in Q3: its holdings rose by 840 koz.

 

 

Tue, 11/15/2011 - 09:43 | Link to Comment casey13
casey13's picture

The Sino Forest audit commitee has released their results - Not Guilty

http://app.quotemedia.com/quotetools/newsStoryPopup.go?storyId=46122599&...

TORONTO, Nov. 15, 2011 /CNW/ - Sino-Forest Corporation ("Sino-Forest" or the "Company") (TSX: TRE) today announced the findings of the Independent Committee of the Company's Board of Directors (the "IC").  Sino-Forest also today announced that it is deferring the release of its third quarter financial 2011 results ("Q3 Results").  All references to $ amounts contained in this press release are to United States Dollars.

Mr. Judson Martin, Vice-Chair and CEO of the Company stated "This has been an intense and challenging process and I am pleased that the Independent Committee has been able to refute the substance of the allegations made in the Muddy Waters report.

"The Independent Committee report verifies the Company's stated cash balances, confirms registered title or contractual rights to the Company's stated timber assets, as well as the book value of these assets, reconciles reported total revenue and refutes the allegation that Yuda Wood is a subsidiary of the Company.  We can categorically say Sino-Forest is not the "near total fraud" and "Ponzi scheme" as alleged by Muddy Waters."

"The Independent Committee and Audit Committee are verifying information regarding certain of the Company's relationships with its suppliers and Authorized Intermediaries and addressing other issues that must be resolved before the Q3 Results can be released.  We are confident this work will be carried out quickly and our current plan is to release our Q3 Results within the next 30 days.  As the Independent Committee report notes, its work is substantially complete.  We look forward to the Independent Committee's final report which we expect to be released prior to year-end."

"While the investigation has been difficult, we have also learned much through this process, including a better understanding of the way we need to communicate the operational and regulatory complexities of operating in our industry in China in order to give confidence to our international investor community.  We also found that the Company's internal processes, infrastructure and breadth of management team have not kept pace with the growth of its operations.  These shortcomings will be addressed: we have a plan to improve our governance and processes going forward, and we plan to add further qualified staff.  We are also exploring ways to simplify our business structure, which we believe will provide greater comfort to our investors."

"To say that this has been a tough time for our employees, investors and our Company as a whole would be a huge understatement. A great deal of financial and reputational damage has been caused by unfounded accusations made by a short-seller, who we understand personally profited a great deal from the losses of others.  Far from being a "near total fraud" and "Ponzi scheme" as alleged by Muddy Waters, Sino-Forest is a real company, with real assets and real revenue.  We are reserving our rights to respond to this matter."

Tue, 11/15/2011 - 09:47 | Link to Comment eddiebe
eddiebe's picture

Wise man sez: One gold coin in hand is worth two gold promises in bank.

Tue, 11/15/2011 - 10:00 | Link to Comment High Plains Drifter
High Plains Drifter's picture

"A Secret Society gradually absorbing the wealth of the world."
"THE NEXT 200 YEARS ... THE SEIZURE OF THE WEALTH NECESSARY"<<<<

 

say what ?  .....on come now.  don't shit me , pal..........

Tue, 11/15/2011 - 10:07 | Link to Comment apberusdisvet
apberusdisvet's picture

BIG CNBC NEWS THIS AM:

"Paulson sells 2/3 of gold bullion"

Hows that for disinformation propaganda.  Since when is anything connected to GLD actually real.  Bullion my ass.

Tue, 11/15/2011 - 10:28 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Better get out the test kit Hugo.....

Tue, 11/15/2011 - 10:40 | Link to Comment slvrizgold
slvrizgold's picture

If this IDIOT wants to make some money, he should sell ALL his fake paper derivative fiat gold and buy 100% physical silver.   Although he'll have to wait 2-3 years for physical delivery LOLOLOLOL

And yes he is an IDIOT.   What kind of mouth-breathing half-wit retard buys C BAC etc???   Warren "High tax/Big Govt/hate gold" Buffoon???    And his gold miner plays?  MORONIC.   Anglo-gold, Gold Fields, Barrick LMAO!!!   Don't buy the stodgy NO GROWTH seniors, especially ones with the bulk in South Africa or miners who have history of hedging gold at below production costs and who want to be copper miners!   Buy baskets of quality midtiers and liquid juniors.

I'm sure everyone will castigate me for not being a billionaire.  EVEN I COULD BECOME A BILLIONAIRE IF I COULD PACKAGE UP HUGE TRANCHES OF WORTHLESS ASSETS AND CALL THEM AAA AND THEN BET AGAINST THEM AFTER I SOLD THEM TO GULLIBLE MORONS.   

Fuck these elitist pricks, they are no better and smarter than the best among us "little people."    And they will fail when they make MORONIC investments like the above jackasses.   If Warren Buffoon still had his silver position, Bill Gates would be his limo driver when he wasn't busy marketing toxic vaccines for his depopulation program.   The world will be a better place when people stop being like Ghandi and fuck over these scumbags and put them where they belong.

Tue, 11/15/2011 - 11:13 | Link to Comment Sizzurp
Sizzurp's picture

Cashing up for redemptions out the ass is the more likely explanation.

Tue, 11/15/2011 - 14:59 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Gold and Silver daily charts bearish warning continues and further downside expected.

NASDAQ megaphone pattern on daily chart indicates a big move lies ahead.

SP500 monthly chart remains bearish and USDX weekly remains bullish, so it’s only a matter of time until the market makes its move.

http://stockmarket618.wordpress.com

Tue, 11/15/2011 - 16:41 | Link to Comment DosZap
DosZap's picture
Grand Supercycle,

You saying Gold is going back into the $600.00s?.

It MAY, but you will never be able to buy ONE ounce at that fiat dollar price.

Do NOT follow this link or you will be banned from the site!