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Friday, May 18, 2012

Soros Plows Back into Gold (GLD)

The schizophrenic words and actions of George Soros are back in play, as the billionaire investor, contrary to comments made in the recent past that gold is the "ultimate asset bubble," has now poured capital into the yellow metal again, presumably because it's probably nearing the end of its correction.

Even if the correction has some more room to run, there's no way to time how low it will go, so entering now, before he has to start chasing it, is a wise decision.

The major move by Soros into gold is the increasing of the holdings of his hedge fund in SPDR Gold Trust (NYSE: GLD) from SPDR Gold Trust from 85,450 shares in the fourth-quarter to 319,550 shares in the first-quarter, according to Fox Business.

He reportedly also opened up "a new position through call options in Newmont Mining (NYSE:NEM)," adding significant exposure to gold there.

This of course contradicts Soros' words, which proves one needs to watch what is being done rather than what is being said.

There is no gold bubble yet, neither are we close to one. As Soros former business partner Jim Rogers recently said, the gold bull market is far from being over. He's right.

Short term, because of gold and silver prices being driven by headlines from the European sovereign debt crisis, we'll see a lot of volatility in the prices, mostly because the U.S. dollar temporarily continues to perform strongly against the euro as people view it as the best place to safely put their capital.

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