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While the bomb shell on Tuesday were the rumors that billionaire investor George Soros was exiting his position in gold, fewer people seemed interested in the bullish case for precious metals, presented by hedge fund titan John Paulson.
Paulson, who recently said gold would rise in proportion to Bernanke’s dollar printing, reportedly told investors he’s still very bullish on precious metals. Paulson told investors on Tuesday morning that gold prices could go as high as $4,000 an ounce on U.S. and U.K. money supply-flooding. The controversial rumors that Soros begun selling his gold, elucidated here in a piece by Forbes’ Robert Lenzner, harnessed all the attention on Tuesday as gold and silver prices tanked. (Read John Paulson: Gold Will Rise In Proportion To Bernanke’s Dollar Printing).
Investors, though, will have to choose which side to take, Paulson’s or Soros’, as both hedge fund heavyweights go opposite ways on the same trade. While reports that Soros is dumping his gold haven’t been officially confirmed, Paulson continues to tell his investors he still has most of his money in gold—denominated funds operated by his firm, Paulson & Co, according to ZeroHedge.
Silver, which has seen an incredible surge in recent months as speculative money makes its way into the market, faced a precipitous dive in recent days. Amid intense “bubble” chatter, silver went from flirting with all-time high nominal valuations to an almost 20% drop in approximately one week. The iShares Silver ETF (SLV), which tracks the spot price of silver by holding physical metal, remains up nearly 30% year-to-date; recent commentary on Forbes had been calling for a 10% correction and a move back to circa $34/ounce, within a broader bull market. (Read Lenzner’s piece, Gold And Silver Are Due For A 10% Correction and my piece, ‘Gravity Defying’ Silver Will Fall Back To $34/oz).
Gold to be delivered in May was down 2.1% to $1,507.10 an ounce in New York, while silver contracts for May had tanked 7.9% to $39.24 by 1:43 PM local time. Below is a chart of gold and silver prices as tracked by their respective ETFs, GLD and SLV.
source:forbes.com
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