the investor who loves to confuse markets – remember how his
description of gold as the ‘ultimate bubble’ confused some folk as he
bought the metal himself – George Soros has done it again with his gold
the global financial press is awash with reports that Mr. Soros has sold
gold again. True. But he has reinvested that money in a far more risky
investment in gold miners whose performance is leveraged against the
gold price. They go up faster than the gold price and they fall further
when it comes down too.
Soros Investment Fund’s 13F filing does indeed show the sale of 12 per
cent of his total investment in GLD. But it also reveals that he then
used $40 million of that cash to buy shares of the Market Vectors Gold
Miner Major ETF (GDX).
he also bought $25 million worth of call options on the Market Vectors
Gold Miner Junior ETF (GDXJ). As all gold mining stocks are leveraged
plays on the price of gold and the juniors are the most leveraged bet of
all, this is very bullish. The second investment in the juniors is
about as bullish on the gold price as anybody could get.
typical of Mr. Soros to put the cat among the pigeons again. He likes
of course to throw up a smokescreen in one direction while moving off in
another. The true mark of the master trader. ArabianMoney has also
jumped in the same direction (click here). Readers of our monthly investment newsletter got this tip last month (subscribe here). It’s a bit late to read about it today.
looks a clever move, so long as the stock market’s current euphoria
holds up, and gold bounces off $1,321 as a testing of the bottom of the
last sell-off. Still Mr. Soros knows his market timing and following in
his wake usually pays off handsomely. But better still to be ahead of