Paulson Holds Gold, Soros, Robertson Sell

Hedge fund managers were cautious in the latest quarter in reference to their gold investments, with John Paulson holding onto his gold investments, while George Soros sold some of his and Julian Robertson sold all of his fund's stake in Market Vectors Gold Miners ETF.

Paulson didn't sell any of Paulson & Co.'s 21.8 million shares in SPDR Gold Trust, of which the fund is the biggest shareholder in.

With the price of gold dropping, that obviously had a negative impact on the value of Paulson's stake in SPDR, as it fell from a value of $3.75 billion to $3.54 billion in the fourth quarter. During the fourth quarter spot gold prices dropped about $100 an ounce, or close to five percent.

Paulson also held onto stakes in major gold miners AngloGold Ashanti and Barrick Gold (ABX), among a number of others.

George Soros cut his position in SPDR Gold by over 50 percent from the 1.32 million he held in the third quarter to 600,000 shares in the fourth quarter.

Via Tiger Management, Julian Robertson held onto his stake in the Junior Gold Miners ETF.

All of this isn't entirely unexpected, as it was thought that gold could drop in the short term while rebounding as the year goes on.

This should be the case, with gold and other commodities jumping once the equities market begins to correct.

At this time gold is pressing down towards the $1,600 an ounce mark, with some believing it'll go below that in the not-too-distant future.

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.

Kinross (KGC) Generates Mixed Reaction from Billionaires

With John Paulson selling some of his stake in Kinross and George Soros adding to his position, it underscores the fickleness of the stock and it relative underperformance in relationship to physical gold.

Kinross had a decent quarter, and generate revenue of $920.4 million, a record for the company. They also generated $3 billion in revenue for full year 2010.

Costs related to exploration at Tasiast dragged earnings down for the fourth quarter, dropping to $144.7 million, or 13 cents a share; down 38 percent from the same quarter the year before. Tasiast came with its acquisition of Red Back Mining.

For 2010 Kinross produced 676,635 ounces of gold at $551 an ounce, and for the full year, gold production reached 2.3 million ounces at $508 an ounce. The gold miner was able to sell gold for $1,333 an ounce in the quarter, generating strong margins.

Guidance was for 2011 production to reach 2.5 million to 2.6 million ounces of gold at a cost range of $565 to $610 an ounce.

Now as to why Soros increased his position in Kinross when it has been underperforming, it could be the Tasiast mine. On its conference call the company pointed out production at the mine could average 1.5 million ounces annually by 2014 at a cost of about $500 an ounce. The company also believes gold reserves could be significantly higher than original estimates.

He also could be thinking the stock could be ready to break out, which is quite possible after a disappointing year.

Kinross continues to pay out a semi-annual dividend of 5 cents a share.

Kinross closed Thursday at $16.64, losing $0.35, or 2.06 percent.

NovaGold Resources (AMEX:NG) Starting to Make its Move?

NovaGold Resources (AMEX:NG), if for no other reason, has garnered some attention because of investment of major players like George Soros, John Paulson and Marc Faber. Faber also sits on the board of the company.

NovaGold recently started to make a momentum move, although they have pulled back with the price of gold, although they've rebounded nicely today.

They continue to be a long-term investment, even though they will make money in the short term from momentum alone because they are largely undervalued, and the long term for the same reason.

But much of the company is potential at this time, because their huge Donlin Creek project in Alaska will take time to bring online. Some measure that project alone as pricing the company at about $40 a share.

NovaGold is trading at $14.44, gaining $0.97, or 7.20 percent as of 12:25 PM EST.

SPDR (NYSE:GLD), Market Vectors Gold (NYSE:GDX) Draw Hedge Fund Interest

Last quarter a number of hedge funds revealed in their required 13-F filings that they invested heavily in SPDR Gold Trust (NYSE:GLD), and to a lesser extent, Market Vectors Gold Miners ETF (NYSE:GDX).

Investing in SPDR were Third Point LLC, Highfields Capital, and the hedge fund ran by Chris Shumway, a former big trader at Goldman Sachs (NYSE:GS).

Highfields also invested in Market Vectors Gold Miners ETF, buying up 200,000 shares. They acquired 1.6 million shares of SPDR. Third Point bought 115,000 shares of SPDR, and Shumway's fund, 2.1 million shares.

On the other hand, George Soros divested of some shares in SPDR, while also getting rid of entire stakes in some gold miners.

It was somewhat of a mixed bag last quarter, with the hedge funds mentioned above, with the exception of Soros' adding to their gold positions.

While others sold shares also, all of them still retained significant gold exposure in them. It seems they think they may be at the top of the short-term upward move, and are poised for a correction.

The fact that they held so many shares speaks to the fact gold isn't near the end of its bull run by any means, and have taken profits at the top of the price while probably waiting for the correction to invest in gold again.

Monsanto (NYSE:MON) Needs to Show it Can Grow Corn Seed Share

Even though Monsanto (NYSE:MON) has received a boost recently when field results revealed their SmartStax corn yields were better than competitors after earlier tests were disappointing, that may not be enough of a catalyst to push the company forward, are expectations are they'll have to prove they can grow their share in corn seeds, as they lost some to competitors over the last year.

Now the question they must answer is also if the improved results are worth the premium cost of the seeds, something DuPont (NYSE:DD) has successfully created doubt about in a significant number of farmers, helping them grow share..

Deutsche Bank (NYSE:DB) believes they'll struggle over the next year to do that, and downgraded Monsanto from "Buy" to "Hold."

“We are downgrading Monsanto to Hold as the shares are within 5% of our target and we see few near-term catalysts. While last week’s yield data put to rest lingering doubts over Monsanto’s next generation seeds, with the shares trading at a 70% premium to the S&P 500 we believe upside is limited over the next 3-6 mos. Over the next 6-12 mos, we believe Monsanto needs to grow volume and/or gain share in US corn for the shares to outperform. However, with competitors also targeting share gains in ‘11, we believe this could be a challenge," said Deutsche.

Deutsche Bank analyst David Begleiter added, “The key for Monsanto shares to outperform over the six to twelve months is for Monsanto to translate these advantages into volume growth and share gains in the key U.S. corn seed market."

Last quarter George Soros added a significant number of Monsanto shares to his fund.

Monsanto closed Monday at $60.79, falling $1.36, or 2.19 percent.

Soros Sells Ivanhoe (NYSE:IVN), Golden Star (NYSE:GSS), Gold Fields (NYSE:GFI), Barrick (NYSE:ABX), Newmont (NYSE:NEM) and SPDR (NYSE:GLD)

George Soros' "Soros Fund Management" decreased a number of its gold assets in the third quarter, either lowering positions in or selling off completely, Ivanhoe (NYSE:IVN), Golden Star (NYSE:GSS), Gold Fields (NYSE:GFI), Barrick (NYSE:ABX), Newmont (NYSE:NEM) and SPDR (NYSE:GLD)

Soros sold his entire stake in Ivanhoe Mines (NYSE:IVN), Golden Star Resources (NYSE:GSS) and Gold Fields (NYSE:GFI).

He also lowered positions in Barrick (NYSE:ABX), Newmont (NYSE:NEM) and SPDR (NYSE:GLD), although his holding in SPDR is still among the highest in the fund.

Soros has mentioned gold being the ultimate bubble, but that's not really why he's divesting some now. It's just that gold is at historical highs and has been due for a correction for some time, and we're probably in the midst of one now, although it's an uncertainty as to if it's short-term and shallow, or long-term and deep.

More than likely it's short-term and shallow, as there are too many economic disasters around the world to keep gold down, and speculation about China's interest rates won't be enough by itself to cause gold prices to plummet.

Allied Nevada (NYSE:ANV) Sells 5,000 Shares of Company

The president and CEO of Allied Nevada Gold Corp. (NYSE:ANV), Scott Andrew, sold 5,00 shares he held in the company for an average price of $26.21. He sold the shares on September 15, 2010.

Interestingly, institutional investors have been plowing investment into the gold miner, increasing the amount of shares owned from 69,878,861 shares to 83,606,659 shares over the last three months. That's just under a 20 percent increase.

Altogether, institutions now own over 94 percent of the company.

Institutional investors in Allied Gold include Chuck Royce of Royce & Associates, Steven Cohen of SAC Capital Advisors, and George Soros of Soros Fund Management LLC.

George Soros Clueless on Gold and "Ultimate Bubble"

George Soros seems to be clueless on gold and his obsession with it being the "ultimate bubble."

Soros doesn't seem to understand the reason there's support under gold and why that will continue for a long time.

He said to Reuters, “I called gold the ultimate bubble which means it may go higher but it’s certainly not safe and it’s not going to last forever,” although reluctantly admitting it's the only bull market at this time.

One reason Soros asserts this is he's big government socialist, and has out-of-the-mainstream views on politics and life.

Gold interferes with his worldview in that regard, and even though he has millions invested in gold, continues to hammer at it as if it's poised to plunge at any time.

There's no problem with Soros saying gold is an ultimate bubble, as someday in the far future that will eventually play out, especially when investors and the average person on the street all pour their money into it without knowing why, and far past the reason it is going up at this time.

That's the overall practice of fast-moving stocks and bull markets of any kind throughout history.

Where he's completely wrong is in he says gold isn't safe. Gold is safe, but it of course, like anything else, depends on how someone is investing in it, and the degree of overall exposure of their overall portfolio.

The price of gold is going up because of economic weakness and disastrous policies and practices of central banks and governments around the world.

And with the recession continuing on, or at minimum the global economy slowing down significantly, quantitative easing is ready to begin again, which will drive up the price of gold even more.

Of course it's not going to last forever, as Soros says, but that's obvious.

But that's like saying if you live in certain parts of California you're going to experience an earthquake sometime.

Everyone knows that, but you simply need to be prepared for that inevitable moment and respond accordingly. You don't stop living and life because it may happen.

Danger can come anywhere and any time, and safety is always an issue, even when traveling to a neighborhood store.

So to suggest gold isn't safe is like saying living in California isn't safe. What's the point?

As long as the fundamental reasons for the price of gold continuing to rise remain in place, gold prices will continue to rise. It's as simple as that.

when the macroeconomic climate changes, then we all need to remain vigilant with our gold investments.

Gold isn't even close to being in a bubble at this time, as nothing in the global economy has changed to make it be a concern. It will eventually happen, but that is probably a number of years away.

Until governments stop the printing presses and their stimulus plans, gold will continue its upward ride.

Time to Invest in NovaGold (AMEX:NG)?

Novagold (AMEX:NG) has a lot going for it from several angles, including the undeveloped resources they own, partners, and major investors.

As far as resources go, especially gold and copper, they hold some of the largest undeveloped deposits among miners. They also enjoy deposits of numerous other metals like silver and zinc.

Expectations are the cost to develop the assets will be about $4 billion. Factoring that in the stock could still easily be valued at double the close of $7.47 it was at close Thursday in New York.

For partners, they have mining giants Barrick Gold (NYSE:ABX) and Teck Resources (NYSE:TCK), both quality companies.

They also have investors like George Soros and John Paulson putting millions into the company via their hedge funds. Paulson has raised his stake NovaGold to 9.1 percent, according to his last filing.

With guaranteed deposits, and metals prices, in most cases, especially gold, sure to increase going forward, the major question becomes their ability to control costs while raising capital and expanding production.

If they are able to do that, this stock could run for some time, and go far beyond the mid-teens that some think it is really worth now.

NovaGold's (AMEX:NG) Donlin Creek Getting More Expensive?

Now that NovaGold (AMEX:NG) losses have mounted over the last quarter, they are getting more aggressive in pursuing capital to work on their Donlin Creek project, which is by far their most important mine. They are in a 50/50 partnership with mining giant Barrick Gold Corp. (NYSE:ABX) in the project.

Either the costs at the project are increasing, or NovaGold is pushing harder to get it going, as the proven gold reserves of 34 million ounces, valued at about $41 billion at today's gold prices, has them salivating over the prospect of getting gold production going.

Marc Faber recently joined the board of the gold miner, and financial giants like John Paulson and George Soros have invested millions into the company.

At this time all the appropriate studies are being conducted, which take time, and the gold production may not start until as late as 2017.

With NovaGold having to pay close to $2.2 billion in capital costs for Donlin, you can see why they need more capital to operate until production begins.

This is of course nothing new to the industry, but if costs do increase, NovaGold faces challenges over the long term. Having Faber on the board and a resume of Paulson and Soros investing about $175 million in them, they do have a solid foundation and argument to work from.

Now they will attempt to battle to keep their 50 percent stake while raising capital, as their giant partner could easily take up the slack if problems arise, which NovaGold wouldn't want to allow to happen.

Over the long term this is a sure thing, now NovaGold has to raise the needed and significant amount of capital to last long enough to cash in, without giving up anything else.

NovaGold Resources (NYSE:NG) Soars on Gold Prices

Although well off its 52-week high of $9.18, NovaGold Resources (NYSE:NG) was among the gold mining leaders on Friday, surging to close at $7.36, a $0.45 gain, or 6.51 percent.

NovaGold attained its high at the beginning of May.

Hedge fund managers John Paulson and George Soros have both expressed deep interest in the company, investing at least $175 million combined in the gold mining company, with Paulson's hedge fund investing $100 million.

NovaGold holds large stakes in Donlin Creek and Galore Creek, both holding huge reserves of gold, which the company now has the money to develop with its partners.

NovaGold (AMEX:NG) Attracts Big Players, Money

NovaGold Resources (AMEX:NG) (TSE:NG) President and Chief Executive Officer, Rick Van Nieuwenhuyse, seems to have a gift for attracting big players and big money to invest in the company, and that has paid large dividends for them at crucial times of their growth cycle.

Some of those investing in NovaGold Resources include billionaire Thomas Kaplan through his Tigris Financial Group, John Paulson with his Paulson & Co. hedge fund, and George Soros with Quantum Partners Ltd.

In the early part of 2009 they also reached a financing agreement with Electrum Strategic Resources, which saved their major Donlin Creek and Galore Creek projects.

Assuming good gold finds, the secret to success for junior gold miners really isn't a secret, it's who can secure financing for their projects in order to bring them online.

With the track record of Rick Van Nieuwenhuyse and his team, it looks like NovaGold will have a long and successful run, as he recently stated they have enough financing for the next three years.

If they're operationally sound and focus on cutting costs, once they are in strong gold production they should get some great returns for their shareholders.

In addition to gold, they also have copper, silver and zinc resources.

Novagold (AMEX:NG) Iamgold (TSE:IMO) Barrick Gold (NYSE:ABX) (TSE:ABX) Randgold Resources (Nasdaq:GOLD) Added by Paulson & Co

John Paulson continues to like the gold market, and he backed that up with four new positions for his Paulson & Co. hedge fund, adding Novagold (AMEX:NG), Iamgold (TSE:IMO), Barrick Gold (NYSE:ABX) (TSE:ABX) and Randgold Resources (Nasdaq:GOLD), growing the number of gold investments to his already-significant gold positions in SPDR Gold Shares (NYSE:GLD), which is the largest holding in the fund, Kinross Gold Corp. (NYSE:KGC), and AngloGold Ashanti Ltd. (NYSE:AU).

Competitor George Soros, in my opinion, wrongly, reduced his stake in SPDR Gold Shares (NYSE:GLD) by just under 10 percent.

I believe we are far from any type of gold bubble as Soros has stated in the past, and think he's misreading the market by only measuring the idea of a bubble by the price of gold going up, rather than who it is that is investing in it.

There won't be a gold bubble until a huge number of non-institutional investors enter the gold market, and then the underlying fundamentals will have to had reached their full play before a bubble can be formed, let alone burst.

A bubble happens when there is no reason for the price of something going up. If there is a reason, it doesn't matter if the price is bid up, as it is based on fundamentals, whether or not the investors know it or not.

Not only is there very little to cheer about in the global economy, including the U.S., but there is more pressure and danger now than there ever was with the housing bubble and banking bailouts.

Now we're talking of entire countries being bailed out, and inflation in China being a real threat to demand for raw materials, which many around the world have been counting on for growth and an eventual and sustainable economic recovery.

All that may be off the table, and consequently, gold and gold mining companies should continue to go up in value and price as people continue to look for a safe haven outside of paper currencies.

George Soros' SPDR Gold (NYSE:GLD) Stake Lowered

Earlier in the year George Soros had mentioned gold was a bubble ready to burst, although he failed to include the idea that he had made a huge investment in gold interests, including SPDR Gold Trust (NYSE:GLD).

In a recent required 13F filing, Soros revealed that his Soros Fund Management had cut back on his position in SPDR Gold by 9.6 percent, probably from concerns over the high rise in price of the safe haven metal.

This is probably a mistake on Soros part, but we'll wait and see.

I think the thing that Soros misses is the regular guy on the street hasn't entered the gold bull market yet, and that should protect the upward movement in the gold prices from being a bubble.

A bubble usually occurs in any investment sector when those that don't understand the fundamentals of an investment finally decide to invest in it when it is already full priced.

This normally shoots the price of an investment up, when the support for it isn't there, ultimately creating a bubble. That's what happened in the housing market, as people continued to bid the price of homes up thinking there's no such thing as a ceiling on value.

It doesn't seem that gold has entered this phase at all yet, and even if it did, the fundamentals are there to justify it. There will of course be many corrections on the gold bull market journey, but that won't be a bubble.

Market conditions and the unprecedented spending of money and budget deficits ensure gold will continue rising in price for years to come, with the occasional correction along the way.

Eventually there will be a bubble in gold, just like anything else that has gained favor over a period of time before those that are clueless enter into the fray.

Gold is probably years away from that happening, and the economic conditions will ensure it won't be bursting for any time soon, and will continue on its upward climb.

NovaGold (AMEX:NG) Underwhelming to Some

NovaGold a challenge short term, great potential long term

For up to five years, it's possible NovaGold (AMEX:NG) could struggle strongly, even though it has two quality gold projects it has a stake in like Galore Creek and Donlin Creek.

It's not the long term prospects of NovaGold that concerns those following the company, as they are very bright, but it's not as simple as taking a stake in them and letting it ride, because until their large mines start to produce gold, there is a huge liquidity problem they face, which must be addressed and overcome if they're going to reach the day they can truly benefit from their holdings.

Even though John Paulson and George Soros invested $175 million in Novagold, which will help them in the early exploration part of their projects, but isn't much when considering the overall cost and scheme of things.

The two large project mentioned above are estimated to cost about $4 billion each to develop, so you can see that while $175 million helps, it's very little when looking at approximately $8 billion overall.

What NovaGold probably represents is the trend small mining companies which hold solid assets will be experiencing over the next several years, and this is larger companies will have to come in and acquire a large portion of those assets if they're to survive and thrive.

NovaGold has a 50/50 partnership with Barrick Gold (TSE:ABX) in their Donlin Creek project, as part of what we'll see going forward.

If NovaGold can survive the next several years, they do have extraordinary potential, and could generate a lot of profits for those investing in them. One must understand the short-term challenges though to determine how to proceed.

The fact that George Soros and John Paulson invested as they did in them show they understand what the huge potential of the company is, and whatever happens to NovaGold, they will reap the rewards, no matter which way they decide to head in the future.

NovaGold (AMEX:NG) Positioned for Strong Growth

NovaGold Resources Strong Future

Although the current resources of NovaGold (AMEX:NG) haven't been inspiring to investors, those they hold with future potential definitely are, which is why hedge fund investors John Paulson and George Soros made significant investments in the company.

Total investment from the two hedge funds totaled $175 million, and that doesn't include other investors with interests in the gold miner.

Investors with a long term outlook know the extraordinary value in Novagold, as evidenced primarily from their Donlin Creek and Galore Creek projects, which are considered among the largest of any gold projects in the pending development stage in the world.

Novagold is another undervalued gold mining company with not only the two project mentioned above as part of their future, but others as well.

The company has also made quality partnerships with companies like Barrick Gold (NYSE:ABX) and Teck Resources (TSE:TCK-B), along with the financing deals, showing they have a great plan in place and are getting the right partners and financing to go forward with confidence and success.

George Soros and Secret Gold Bull Market Goes On

Secret Gold Bull Market

One of the reasons the assertion that gold is an ultimate bubble by George Soros makes little sense, is he possibly doesn't understand what's really going on in the markets, or he's being the sly fox he is as far as investing goes.

For example, Soros was saying this on one side of his mouth while investing millions in gold mining companies and gold ETFs. So I think Soros was attempting to do some manipulating of the minds there in order to move the market and thoughts in the direction he wants it to go.

The reasoning behind this is Soros almost assuredly knows the general public hasn't been investing in gold, and know very little about it and don't have much interest in it.

Until they come on board in hoards, there's little chance of a gold bubble bursting, as there isn't a bubble without the public entering into the gold investing market.

In reality, most of us who follow gold closely sometimes aren't aware that what is common and everyday to us is mysterious and unknown to the average investor, at least in the Western world.

By the time the average investor comes in, which still may take some time, gold will be much higher and it'll be taken to levels that aren't sustainable and above market prices. That's when we'll have an ultimate bubble.

Until that time, the fundamentals, along with the foibles of central banks and governments around the world are what we need to be concerned with watching.

Once the general public starts to enter the market, that's when we need to be weary. That hasn't happened yet, and I think things will have to get worse, or they get more educated as to why gold is important, before they do come in in droves.

Unfortunately for the uneducated in gold, they'll experience something similar to the housing market because they just can't leave the herd mentality and do the type of research which puts them ahead of the game.

Secret Gold Bull Market