George Soros Is Betting On the Yellow Metal to Rising Again

Recently, publicly disclosed holding regarding Soros Fund Management reveals that the firm has bought $264 million shares in Barrick Gold Corp. George Soros is a legendary investor, and when he makes such a move, he attracts market attention. Soros is betting that the yellow metal will rise again.

Other prominent investors such as Stan Druckenmiller have made a similar move. Earlier this month he stated that he considers gold to be his largest currency as central banks continue to experiment with “absurd notion of negative interest rates”. Phil Davis, CEO, PSW Investments said they are on the same page with Soros. He added gold is a sensible hedge on, not just being bearish on Dollar, but also being bearish on global currencies, which are devaluing their way to negative rates.

Investors are concerned over China economy slump. Earlier, Soros said China economy is setting up for a hard landing, and it adds fuels to global deflationary pressures, drag down stocks, and spur a recession. Besides, many countries are moving toward negative interest rate. This will influence gold positively since people will prefer to buy precious metal rather than paying a bank to hold their money. Gold return looks good when interest rate turns negative.

Moreover, investors have consistently viewed Gold as a safe haven during economic turmoil. Despite lackluster gold prices in recent years, gold for immediate delivery jumped 16 percent in the last three months. According to Bloomberg at generic pricing, since 1986, this is the biggest surge.

The Soros has cut his U.S stock holding by 37 percent to 13.5 billion. On the other hand, George Soros has acquired 1.05 million shares in SPDR Gold Trust and 1.7 percent of Barrick Gold Corp holdings. Leading investment firm such as Glenview Capital Management, a hedge fund led by Larry Robbins are indicating the same move. From stock listed in the last quarter, the equity firm holding had dropped by 22 percent to $13.6 billion.

Soros spent part of his childhood escaping from Nazi Germany. He went to London school of Economics where he studied philosophy under Karl Popper. After finishing his Ph.D. thesis, George Soros could not find work. Later he found his way to finance where he has created legendary investment career in financial markets.

In 1970, George Soros established his own Fund, and created an extensive relationship with investors across the world and made tons of money for them. His Fund recorded 30% average annual returns on investments. Soros notoriety grew exponentially at international platforms when he bet $10 billion against Pound Staring in 1992. His market speculation turned out to be right, and he made $1 billion profit from a single day trade, before the end of the transactions, he had more $2 billion profit. Since then Soros earned the Moniker, “The Man Who Broke the Bank of England”.