(Adds details throughout, including Soros, PIMCO performance))
By Frank Tang
NEW YORK May 15 Hedge fund Paulson & Co in Q1
maintained its stake in SPDR Gold Trust, the world's
biggest gold-backed exchange-traded fund as bullion prices
rebounded from their biggest annual loss in 32 years in 2013,
while PIMCO dissolved its gold ETF investment.
George Soros raised his stake in Barrick Gold Corp
and gold mining companies ETFs, suggesting the big names in
hedge funds took advantage of lower gold prices to increase
positions in the precious metal used by many as a hedge.
Investors pay close attention to the quarterly filings by
Paulson and other notable hedge fund managers because they
provide the best insight into whether the so-called "smart
money" has lost faith in gold as a hedge against inflation and
"Some institutions are stepping up to buy gold this year
just like you would expect them to do when they find an asset
valued at these attractive levels," said Adam Sarhan, CEO of New
York-based Sarhan Capital.
Paulson & Co, led by longtime gold bull John Paulson, owned
10.2 million shares in the ETF worth $1.27 billion on March 31,
unchanged from its holdings on Dec. 31, a filing with the U.S.
Securities and Exchange Commission showed on Friday.
That represents a gain of around $76 million as the price of
gold gained 6.5 percent in the first quarter, following a
drop of around 9 percent in the fourth quarter.
This marks the third consecutive quarter Paulson has stuck
to his stake in the gold ETF.
"It's a plus for the market as big players are still holding
onto gold to a degree, but I don't think that's reflective of
the market tone," said Bill O'Neill, partner at commodities
investment firm LOGIC Advisors in New Jersey.
Gold prices were still 7.5 percent higher for the
year but market watchers said the yellow metal's failure to
rally on geopolitical tensions and lackluster physical demand
suggested downside risks.
In the second quarter of 2013, Paulson slashed its stake by
more than half when bullion prices plummeted $225 between April
11 and 15, a record two-day drop for gold.
Among large institutional investors, PIMCO has dissolved its
position in SPDR Gold Trust, marking its sixth consecutive
quarterly cuts. PIMCO held 6.3 million shares of the gold ETF in
the second quarter of 2012.
Some institutional investors continued to remain bearish on
gold investments as the metal's price came under heavy pressure
from rallying equity markets and an improving economic outlook.
SPDR Gold Trust held near a four-year low at about 800
tonnes of gold at the end of the first quarter, largely
unchanged from its fourth-quarter level.
Institutional investors' massive stakes in SPDR Gold Trust
have tremendous influence in gold prices as redemptions of their
massive ETF mean dumping the metal in the open market.
(Editing by Eric Walsh)