The price of gold fell for a third week in a row as Soros and Paulson went head-to-head (sort of) in the gold market
The price of gold fell for a third week in a row as the prospect of a US rate rise loomed nearer.
The drop followed the release of the Fed’s April meeting minutes on Wednesday, which seemed to imply that an interest rate rise might be on the cards for June.
Although a rate hike was expected by many analysts this year, few expected it to come as early as next month.
Earlier in the week, two billionaire investors went head-to-head, albeit indirectly, with their positions on gold.
George Soros, via his Soros Fund Management portfolio, piled around US$123.5mln into the world’s biggest gold exchange-traded-fund (ETF), the SPDR Gold Trust.
Going the other way, John Paulson, who owns the New York-based hedge fund Paulson & Co., slashed his investment in the same gold-backed ETF by 17%.
Both are heavyweights in the world of investment, although they’ve taken different outlooks on gold in recent years.
Soros hadn’t ventured into the gold market for three years while Paulson is a renowned gold bug, famously making US5bln on the metal back in 2010.
After the release of the Fed’s minutes and the subsequent gold slump, it seemed as though Paulson had come out on top this time, although not everyone was so sure.
On Friday, research house Capital Economics released a precious metals update that forecast the gold price would end the year much higher than its current price, despite the likelihood of a Fed rate hike.
Shortly before UK market close on Friday, gold was down US$2 to US$1,252.
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