Paulson holds on to gold pile in third quarter

Thu Nov 15, 2012 9:19am EST

* Paulson kept 21.8 mln shares in SPDR Gold Trust by end Q3

* Gold ETF stake results in paper gain of about $365 million

* Soros, Texas Teachers boost gold ETF, Windhaven off 46 pct

By Frank Tang

NEW YORK, Nov 15 (Reuters) - Prominent hedge fund manager John Paulson continued to hold a significant stake in gold in the third quarter of 2012, boosting the precious metal's appeal as a hedge against economic uncertainty, a U.S. regulatory filing showed on Thursday.

Paulson & Co owned 21.8 million shares in SPDR Gold Trust at the end of September, unchanged from his stake on June 30, a filing with the U.S. Securities & Exchange Commission showed.

His bet on gold resulted in a paper gain of nearly $364.7 million for the company as the value of its ETF holdings rose to $3.75 billion from $3.39 billion. The increase was due to an 11 percent jump in the price of spot gold during the third quarter.

Turnout from other major fund managers with positions in SPDR Gold was mostly bullish, as billionaire financier George Soros raised his shares in the ETF 50 percent, while Teacher Retirement System of Texas also increased its stake.

Windhaven Investment, one of the major shareholders in SPDR Gold, cut its stake by nearly half, however.

Paulson has, to date, been the biggest holder of SPDR shares, using them to hedge currency exposure. Just last week, a Paulson executive said at an industry conference that the firm remained bullish on the yellow metal.

Analysts read the third-quarter filing by Paulson as a sign that the hedge fund manager, a well-known gold bull, has not lost his faith in the precious metal as a long hedge against inflation.

In the second quarter, Paulson raised his stake in gold for the first time 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.

SPDR Gold is the world's largest gold-backed, exchange-traded fund that held 1,336.3 tonnes in physical gold bullion valued at $74 billion - which also makes it among the world's top ETFs in terms of market capitalization.