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Soros Gold Action Speaks Louder Than 'Bubble' Words

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From GoldCore

Soros Gold Action Speaks Louder Than Trumpeted 'Bubble' Words

Today's AM fix was USD 1,594.75, EUR 1,293.60, and GBP 1,016.74 per ounce.
Yesterday’s AM fix was USD 1,614.50, EUR 1,305.60 and GBP 1,028.34 per ounce.

Silver is trading at $27.70/oz, €22.65/oz and £17.74/oz. Platinum is trading at $1,401.25/oz, palladium at $571.75/oz and rhodium at $1,060/oz.

Gold dropped $8.70 or 0.54% in New York yesterday and closed at $1,599.60/oz. Silver climbed higher before retreating to $27.64, but it then rallied back higher to end with a gain of 0.14%.

Gold is under pressure today despite the likelihood of more QE from the FED, ECB and other central banks and despite the very uncertain and poor macroeconomic outlook.

Positive US data, retail sales grew for the first time in 4 months, may have led to gold weakness and scaled back hopes that the US Fed will take action soon.

On Tuesday, Gold ETF interest increased to its highest level in nearly a month at 2,190.583 tonnes showing how investment demand in the gold ETF is far more ‘sticky’ and long term in nature.

This means that there is a fundamental pillar of support below the gold market which did not exist in the 1970’s.

An important positive development for the gold market is billionaire financiers George Soros and John Paulson have again increased their allocations to gold as seen in the latest SEC filings.

George Soros more than doubled his shares in the SPDR gold trust ETF.

He increased his position in SPDR Gold to $137.3 million in the second quarter from $52 million previously. SEC filing for the second quarter showed Soros Fund Management more than doubled its investment in the SPDR Gold Trust from 319,550 shares to 884,400 shares at the end of June.

In September 2010 (see chart), Soros called gold "the ultimate bubble" and largely dumped his stake in the ETF before gold recorded annual gains in 2010 and 2011 and rose to a nominal high of $1,920.30 per ounce in September. 

There was speculation at the time that he may have sold the SPDR trust in order to own far safer allocated gold bars.

Another billionaire investor respected for his financial acumen is John Paulson and Paulson & Co increased its holdings by 26% by purchasing an additional 4.53 million shares of the SPDR Gold Trust to bring entire holding to 21.8 million shares. 

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. It means that Paulson's $21 billion hedge fund now has more than 44% of the company's assets allocated to gold.

Paulson, who became a billionaire in 2007 by betting against the US subprime mortgage market, lost 23% in his gold fund through July as lower bullion prices and slumping mining stocks led to losses.

The increased allocation by Paulson shows that he has much confidence that his allocation to gold will pay off in the long term. 


Gold Prices/Rates/Fixes /Volumes – (Bloomberg)

According to Bloomberg, Vinik Asset Management, the Boston-based hedge fund founded by Jeffrey Vinik, who formerly ran the Fidelity Magellan Fund (FMAGX), cut its entire stake in the gold ETF. On March 30, the fund held 2.3 million shares, SEC data show. Eric Mindich’s Eton Park Capital also sold all of its 739,117 shares last quarter, a filing showed.

Moore Capital Management LP acquired 120,000 shares of SPDR Gold Trust in the second quarter, a filing showed yesterday. The hedge fund held no shares in the gold fund as of March 31. Moore was also aggressive in selling financial and bank shares such as JP Morgan (JPM), Wells Fargo and US Bancorp.

Gold fell 4% in Q2 but the increased allocations show that some of the smartest money in the world continues to see gold as a buying opportunity. With the Fed having bought $2.3 trillion of debt in two rounds of 'quantitative easing' and all major central banks keeping borrowing costs at a record low gold's fundamentals remain very sound. 

Soros' recent renewed allocation to gold has been far less trumpeted than his gold 'bubble' remark and much trumpeted liquidation of gold holdings in May 2011. Some have suggested that Soros was misinterpreted regarding his gold bubble remark and may have meant that gold will in time become the "ultimate bubble".


Cross Currency Table – (Bloomberg)

Alternatively, Soros wishes to accumulate a large position in gold prior to prices rising even further and was happy to help dissuade the retail public from entering the gold market until he owns a significant amount of gold. 

Some hedge fund managers have been known to talk down an investment while in the process of accumulating.

It could simply be that Soros has changed his opinion regarding gold and does not now view it as a "not safe," "ultimate bubble". This seems likely as he has warned that there is a real risk of a euro break up and is on record regarding having deep concerns regarding the US fiscal situation - both of which are of course bullish for gold.

Paulson told clients in February that gold is his best long term bet, serving as protection against currency debasement, rising inflation and a possible breakup of the euro. 

Given Soros awareness of financial risk it is likely that he also owns physical bullion and not just the more high risk shares in the very public SPDR trust.

Other highly respected managers such as Kyle Bass, Greenlight Capital's David Einhorn and Third Point LLC's Daniel Loeb are on record as favouring more discrete ownership of actual physical gold bullion bars - in an allocated format in a secure vault.

We advise our clients – retail, pension and institutional – to do likewise and own physical gold bullion in the safest way possible.

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

NEWS

Gold edges up on Europe stimulus hopes; US data weighs - Reuters

ECB - Gold Reserves Unchanged In Week to Aug 10 - Reuters

Royal Canadian Mint Unveils New Gold and Silver Bullion Coins – Coin Update

Gold Fund's Collapse Rattles Poland – Wall Street Journal

COMMENTARY

Aaaand It's Gone: This Is Why You Always Demand Physical – Zero Hedge

Which Way Will the Pendulum Swing for Gold? - GoldSeek

Silver Hoard Near Record High Has Transnational Silver Abusers Concerned – Silver Vigilante

“They’re Going to Put the Old System In a Coma”! - CNBC

Ron Paul – “U.S. Treasury Guilty of Counterfeiting Dollars” – Gold and Silver Blog

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Wed, 08/15/2012 - 08:13 | 2706237 diogeneslaertius
diogeneslaertius's picture

STACK PHYSICAL

Wed, 08/15/2012 - 08:16 | 2706251 GetZeeGold
GetZeeGold's picture

 

 

Please donate your gold to George......he's got a new gold digger wife to feed.

 

 

Wed, 08/15/2012 - 08:20 | 2706275 malikai
malikai's picture

He was buying all that for her? The least he could have done was get some delivered instead of that crap digital SPDR gold.

Wed, 08/15/2012 - 08:44 | 2706322 tocointhephrase
tocointhephrase's picture

PAPER BURNS

Wed, 08/15/2012 - 09:10 | 2706384 Arnold Ziffel
Arnold Ziffel's picture
Central Banks Back to Buying Gold

 

Big changes are afoot in the gold market. The short take: The new environment will favor long-term investors who buy and hold for years over speculators who try to trade day-to-day gyrations.

For one thing, central bankers are back buying gold. Think it’s no big deal? The last time we saw the so-called official sector as such a consistent and major buyer was in 1965

Central banks increased their gold hoards by 400 metric tons — each equal to almost 2,205 pounds — in the 12 months through March 31, up from 156 tons during the prior year, according to recent World Gold Council data.

The council “is now confident that central banks will continue to buy gold and has added official-sector purchases as a new element of gold demand,” writes Austin Kiddle in a report for London-based bullion dealer Sharps Pixley.

 

http://blogs.wsj.com/economics/2012/06/11/central-banks-back-to-buying-g...

Wed, 08/15/2012 - 09:23 | 2706405 Popo
Popo's picture

Wait.  Stop.

This post throws a wrench into one of Zerohedge's central theses:  The general ZH position is that gold-backed paper is bullshit.   Ok, I'm with you there!

But now here's this post saying that Soros is showing his hand (ie:  Showing us what's *really* a good investment) because he's silently loading up the truck with gold.    (Nice!).

Except ... Soros is buying gold paper.   Now that's interesting.  Soros is no idiot.

So we could read this as, "Hehe.. Soros is a sucker", but that's probably unwise.  Wall Street is strewn with corpses of those who have thought that way.    Or we could read this as,  "Ah.. here's the 'tell'.  Soros is loading up on Gold", and that's true... but that doesn't answer the question of why paper?

There's a third option... and it ain't good:

The question is, what does Soros know that we don't know?   Because say what you will about Soros, but he's definitely "dialed in".   And betting against him is bad for your financial health.  So why is he buying paper?

The third option is:   Is he expecting a pump and dump? 

Because the one thing about paper is that you can *unload* very quickly...

 

Wed, 08/15/2012 - 09:39 | 2706474 malikai
malikai's picture

Isn't there some stipulation in SPDR's prospectus that talks about how you can only get delivery if you own a large block? I seem to recall there was a certain threshold you had to own in order to get physical from SPDR.

Of course I'm presuming he wanted physical, that is..

Wed, 08/15/2012 - 09:57 | 2706521 Spitzer
Spitzer's picture

good call. Popo man is making a whole lot of noise about nothing and if soros is so great ,he can give him 2 and 20. and if he s so great , why did he lose out on the gold rally by not buying is sept ten.He didnt even get the seasonal right .

 

Its not a good idea to talk down gold in september ffs 

Wed, 08/15/2012 - 10:38 | 2706683 Popo
Popo's picture

But... now we know he did buy.  

Who's talking down gold?  I've been holding physical since the 1990's.   But the dumb-money gold investors just "keep stacking".  (Not a terrible strategy, btw).   The smart money gold investors know "when to stack".

Which one are you?

Wed, 08/15/2012 - 13:10 | 2707187 Nage42
Nage42's picture

Certainly true for SLV.

There were some very specific criteria for where holders can convert shares into a batch of physical for delivery.  You basically had to be tied into a primary dealer and be able to get delivery into their physical vaults, i.e., space in the new JPM or Goldmans vaults in NY.

You can bet your daughter's kidneys that Soros can "meet the strict criteria."

 

I believe the statement made was that certainly for SLV if you met the criteria it was the cheapest way to get very large deliveries of silver made... which made me wonder why Sprott was whining about how hard it was to get $30M sourced... when he could have just brokered it via SLV... maybe he was just against putting money in his competitor's pockets?

Inquiring minds want to know.

 

Wed, 08/15/2012 - 09:46 | 2706488 Temporalist
Temporalist's picture

Another option maybe; Soros, like the Chinese who were exchanging shares of GLD as a way to get physical , wants a lot of physical quickly and he believes this is the fastest way to get it. One thing about GLD is buying a lot of it won't move the gold price higher so he will pay less by not making a massive purchase of physical outright and driving spot up.

 

Or he believes that getting the physical out of GLD will collapse them and he's also shorting it so he gets some physical and gets paper gains.

Wed, 08/15/2012 - 09:48 | 2706497 ParkAveFlasher
ParkAveFlasher's picture

1) Buy paper

2) Own paper

3) Control price with paper

4) Buy physical

5) Own physical

6) Sell paper

7) Own physical

7.5) Repeat

8) Control price with physical

9) Gold, bitchez!

The fact that Soros' position in paper gold keeps flipping from buy to sell to buy to sell and back again at more or less a regular rate is the tell here. 

Wed, 08/15/2012 - 11:41 | 2706865 HungrySeagull
HungrySeagull's picture

Paper cuts, known to reduce the strongest man into a mewing begging heap.

Wed, 08/15/2012 - 08:17 | 2706260 Doubleguns
Wed, 08/15/2012 - 08:13 | 2706240 Watauga
Watauga's picture

Whatever happened to ZH's favorite line? "Gold Bitchez!"

Wed, 08/15/2012 - 08:15 | 2706252 GetZeeGold
GetZeeGold's picture

 

 

What took you so long?

 

Wed, 08/15/2012 - 08:33 | 2706301 LULZBank
LULZBank's picture

Bitchezz got moody.

Wed, 08/15/2012 - 10:05 | 2706542 dottjt
dottjt's picture

Soros probably bought the rights. 

Wed, 08/15/2012 - 12:14 | 2706950 mr_T
mr_T's picture

Those two catz will definitely take physical delivery before the ETF is crashed. If I had to bet the gold will be shipped and stored in HK or Singapore...or outside the US somewhere.

Wed, 08/15/2012 - 08:13 | 2706241 diogeneslaertius
diogeneslaertius's picture

buy gold like you are a Chinese Central Banker

Wed, 08/15/2012 - 08:24 | 2706284 mick_richfield
mick_richfield's picture

You mean under an alias?

Wed, 08/15/2012 - 08:14 | 2706244 fireangelmaverick
fireangelmaverick's picture

You cannot print gold. Wait, is that eat or print?

Wed, 08/15/2012 - 08:14 | 2706248 TrumpXVI
TrumpXVI's picture

Okay, so Soros and Paulson added to their paper gold holdings.  What exackitickly does this mean?  Are they bullish or just part of Team Whack-a-Mole?

Wed, 08/15/2012 - 08:19 | 2706272 StychoKiller
StychoKiller's picture

Read the prospectus for GLD -- then be amazed that anyone with some brainz would buy into it!

Wed, 08/15/2012 - 08:34 | 2706306 LULZBank
LULZBank's picture

What does it say. Surprise us.

Wed, 08/15/2012 - 08:21 | 2706280 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

It means Goldcore is talking their book with shameless confirmation bias.

Wed, 08/15/2012 - 09:31 | 2706443 Bay of Pigs
Bay of Pigs's picture

No shit. Not once did they mention GLD.

SPDR Gold Trust? Yeah, okay...whatever.

Wed, 08/15/2012 - 08:15 | 2706250 Hype Alert
Hype Alert's picture

Soros, a man you can trust.  To lie.

Wed, 08/15/2012 - 08:17 | 2706253 falak pema
falak pema's picture

so the big boys are increasingly into paper gold?

That does not fit in with ZH's analysis in its takedown of the Polish Amber gold  ETF.

Que passa? Of mice and men...Who is blind mice and who are the men?

Wed, 08/15/2012 - 08:16 | 2706254 johnnymustardseed
johnnymustardseed's picture

Is Soros bigger than JPM(the FED) and their computers????? I don't think so. They will continue to protect the fiat.

Wed, 08/15/2012 - 08:34 | 2706302 mick_richfield
mick_richfield's picture

Fiat doesn't matter.  Power matters.

The Powers will protect the fiat currency regime only so long as it is effective in protecting their power.

They know it will not last forever, so they have been accumulating PMs for the last 40 years, effectively robbing all the world's nations of their real money simultaneously.  paying for the gold with funny-money. 

They now have acquired a much larger fraction of the world's gold than they had at the beginning of the fiat currency regime that they forced on the world, using WWII and American military power as the fulcrum..

When that regime has been pushed as far as it can, and is starting to become unstable, they plan to 'pull' it themselves, sacrifice a bunch of their well-known lieutenants, and come back when the dust settles with a restored real-money system.

That's the plan, as I see it. If it works, they will own the world for another 500 years.

I don't think it's going to work.

 

 

Wed, 08/15/2012 - 08:37 | 2706310 LULZBank
LULZBank's picture

Can we send them all to some desert or some barren island with ALL THEIR GOLD, while we humans just carry on with life?

Wed, 08/15/2012 - 08:48 | 2706325 Colonel
Colonel's picture

That's not how parasites operate. Who's only claim to fame is lies,deceit and manipulation. They would still need the "host" of humanity.

Wed, 08/15/2012 - 08:54 | 2706338 LULZBank
LULZBank's picture

Thats not how "hosts" operate, they need lieing, deceiving and manipulating parasites to tell them all is well and everything is under control and they can enjoy the food circus, relieved of thier individual social responsibilities.

Wed, 08/15/2012 - 09:00 | 2706354 Colonel
Colonel's picture

Also if you observe animals in nature with parasites on or in them it appears the host animal is not even aware of them, that's where the media/presstitutes comes in, that's their function.

Wed, 08/15/2012 - 09:06 | 2706374 LULZBank
LULZBank's picture

Also if you observe animals in nature, especially domesticated cattle like sheep, they are fed and bred to be fleeced and slaughtered by the farm keepers. Its their right and no foul play there. No reason for sheeple to complain.

Yes yes... its the fault of the media, otherwise we are all so smart and responsible.

Wed, 08/15/2012 - 09:35 | 2706462 Colonel
Colonel's picture

"they are fed and bred..."

Well, then they're not very good "ranchers".

Wed, 08/15/2012 - 10:24 | 2706631 LULZBank
LULZBank's picture

I do agree on their incompetance.

Wed, 08/15/2012 - 09:00 | 2706355 mick_richfield
mick_richfield's picture

They don't think they are parasites.

They think they are ranchers, and we're the cattle.

I must admit I can sometimes see their point, when I see how much my fellow men desperately desire to act like dumb beasts.

Do the wolves make the sheep docile, or do the sheep demand their ownership by the wolves?

 

Wed, 08/15/2012 - 09:13 | 2706388 LULZBank
LULZBank's picture

Exactly.

Just easlier today, I was chatting with a friend, a hardcore believer of the status quo and media lines, and as of late I just agree to the official line and was agreeing with everything he said.

i.e. in a couple of years things will be back to normal and green shoots everywhere and I also said the Central Banks were doing a good job by supporting the banks with doses of QE, which will help the banks to get back on their feet again.

And he goes, "finally I saw some optimism from you and I feel much better now."

My sarcasm of "Glad to be able to help you sleep peacefully at night" was totally lost on him.

Fuck the Sheep.

Wed, 08/15/2012 - 09:30 | 2706440 mick_richfield
mick_richfield's picture

Neo:  Can't you unplug them all?  Can't you just wake them all up at once?

Morpheus:  We tried it once, with an entire sector.

Neo:  What happened?

Morpheus: They plugged themselves back in.  Almost all of them.

 

I think the deal is this:  sheep cannot be free.  If we simply kill all the wolves, the sheep will create new wolves

Wed, 08/15/2012 - 09:38 | 2706467 LULZBank
LULZBank's picture

Precisely.

The sheeple might even come after you for killing their wolf overlords.

Im not preaching anymore. Someone wants to jump off the cliff, I'd give a helping hand.. a push.

Be a Wolf... Fuck the Sheeple!

Not because Im greedy or perversive, but because I think soon my survival will depend on it.

The ruled are no better than the rulers.

Wed, 08/15/2012 - 09:42 | 2706482 mick_richfield
mick_richfield's picture

In the food chain model, you must be a wolf or a sheep.

But I think there is another model.

 

Wed, 08/15/2012 - 11:20 | 2706817 Deo vindice
Deo vindice's picture

'"I think the deal is this:  sheep cannot be free.  If we simply kill all the wolves, the sheep will create new wolves."

They don't even need to do that. They will just bite whoever is trying to help them.

I once heard an amazing fact from a man who was a sheep farmer:

The number one injury suffered by shepherds is ... bites from their own sheep.

Wed, 08/15/2012 - 11:53 | 2706903 nofluer
nofluer's picture

"Fuck the Sheep."

In MOST places, that's illegal... Are you proposing a change in the law, or just that exceptions be made For the elites? ;-)

Wed, 08/15/2012 - 11:39 | 2706863 nofluer
nofluer's picture

Not quite a year ago I was thinking about "The" Plan. Here's what I figured...

http://michaelepicray.com/2011/09/19/if-the-government-lost-the-ability-...

And soon after I posted a prescription for recovery -

http://michaelepicray.com/2012/04/19/need-a-prescription-for-economic-re...

to which I would add to #4, require the unlimited liability model of bank owners for loans and deposits.

Wed, 08/15/2012 - 08:16 | 2706256 madcows
madcows's picture

What good is an ETF?  It's only worth the paper it is printed on.

That said, the Oligarchs recognize the collapse is at hand and they are preparing.  You should do likewise.

Wed, 08/15/2012 - 08:17 | 2706258 Sean7k
Sean7k's picture

Big time Elites buying gold paper to protect the funds from being exposed for having no inventory. They have this collusion thing down pat. If it all goes to crap, it will be their "investors" that take the hit. 

Wed, 08/15/2012 - 08:17 | 2706262 fonzannoon
fonzannoon's picture

i think soros has a better chance of getting delivery than any of us

Wed, 08/15/2012 - 08:38 | 2706312 LULZBank
LULZBank's picture

Him getting delivered some lead or cyanide could be a much better deal for some.

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