* Soros nearly wiped out stake in SPDR Gold Trust in Q1
* John Paulson holds on to 31.5 mln stake in gold ETF
* Eton Park halves stake in SPDR Gold Trust
* Touradji sells gold stake, Astenbeck buys gold ETF
By Frank Tang and Aaron Pressman
NEW YORK/BOSTON, May 16 Billionaire financier
George Soros, who called gold "the ultimate bubble," dumped
almost his entire $800 million stake in bullion in the first
quarter, well before a commodities slump blamed partly on
reports he was liquidating his holdings.
Famed gold bull John Paulson held his ground, but Soros was
joined in the retreat by several other big names, including
Eric Mindich and Paul Touradji, according to 13-F filings with
the U.S. Securities and Exchange Commission that provide the
best insight into where hedge funds are placing their bets.
Soros, who has been bullish on gold in the past several
years, cut his holdings in the SPDR Gold Trust (GLD.P) to just
$6.9 million by the end of first quarter, compared with $655
million in December, becoming the most high-profile investors
to turn his back on one of the market's best-performing
He also liquidated a 5 million share stake in the iShares
Gold Trust (IAU.P), the filings showed. His total holdings in
gold-backed ETFs was $774 million as of December.
Gold rose for a tenth consecutive quarter in the three
months to March, hitting record highs above $1,400 an ounce,
buoyed by political turmoil in the Middle East and North Africa
and lingering worries about indebted European countries.
The gains accelerated in April, but peaked at the start of
this month, reaching a record $1,575 an ounce on May 2.
Prices have since fallen more than 5 percent amid the
biggest commodities slump since late 2008, a move partly
triggered by a Wall Street Journal report that Soros' $28
billion fund was selling precious metals -- and felling fears
other big funds were also seeing a peak.
Eric Mindich, who runs the Eton Park Capital Management,
nearly halved his stake in the SPDR gold trust to $326 million
for the first quarter, a filing showed on Monday.
Mindich's fund also owned $839 million worth of call
options by the end of first quarter, compared with $1.1 billion
worth of put options at the end of the fourth quarter.
Touradji Capital Management, one of the world's largest
commodities-oriented hedge funds run by Paul Touradji sold
173,000 shares in the SPDR Gold Trust during the quarter. Those
shares would be worth about $25 million at current prices.
But John Paulson, who notched the industry's biggest ever
payout last year, kept his 31.5 million share or $4.4 billion
stake in the SPDR fund, remaining the biggest shareholder of
the world's largest gold-backed exchange traded fund for the
quarter, according to regulatory filings.
DEFLATION THREAT RECEDES
The sales make sense given that Soros said he had bought
gold because he was worried about deflation, said Mark
Luschini, chief investment strategist at Janney Montgomery
Scott in Pittsburgh.
"It's pretty hard to make the case for deflation right now
so if that was a reason you were buying gold, you should take
this signal from Soros," he said.
Inflation is now the greater concern, Luschini said. So
most investors should still keep about 3 percent to 5 percent
of their assets in gold to protect against inflation and
possible further problems in the world financial system.
Soros also slashed stakes in gold and silver mining
companies during the first quarter. The firm owned 1.4 million
shares of Kinross Gold (K.TO) at the end of the quarter, down
from 4 million shares three months earlier. Holdings in
Novagold Resources (NG.TO) dropped to 3.5 million shares from
Gold ended the first quarter little changed, as the spot
gold prices XAU= were only $10 higher to end at $1,430 an
ounce on March 31, and the SPDR Gold Trust (GLD) was up 1.3
In the second quarter, gold hit a record high $1,575.79 an
ounce on May 2 fueled by the outlook of low U.S. interest
So far in the second quarter, SPDR Gold Trust's bullion
holdings gained only about 1 percent to 1,229 tonnes as of
Friday, well below its record high at 1,320.436 tonnes set on
June 29 last year.
Institutional investment managers are required to file form
13-F with the SEC within 45 days after the end of each
(Reporting by Frank Tang, editing by Andre Grenon)