GOLD NEWS

Gold slips further as Soros, Moore Capital sell gold ETFs. Paulson stands firm

Gold has turned down again following the news of some big liquidations by Soros Fund management and Moore Capital in their SPDR Gold trust holdings and others.

LONDON (Mineweb) - 

Gold slipped back further as news emerged that Soros Fund Management and Moore Capital had both sold significant proportions of the gold ETF and Fund holdings during Q4 2012.  Some comfort for investors remained in that Paulson & Co (John Paulson’s investment vehicle) maintained its SPDR Gold Trust holding at 21.8 million shares – the fund’s largest investment.

But, Bloomberg reports, the Soros fund cut its SPDR holding 55% to 600,000 shares as of the year end, while Moore Capital is reported as liquidating its total SPDR holding and cutting its stake in the Sprott Physical Gold Trust.

These moves by billionaire investors Soros and Louis Moore Bacon may well unnerve the market further and there could be further slippage in the gold price to come over the next few days, and with China into its New Year holiday, which ends today, a buying boost from there is unlikely until next week – although if the speculation is correct and China is buying on dips, there could be a price recovery in early Monday trading.  Also, the theory goes, that given China has effectively been encouraging its citizens to purchase gold, it won’t allow the price to fall too drastically and it certainly has the financial clout to prevent this happening, while at the same time help reduce its enormous dollar related portion of reserves.

But prepare for a new set of bank price downgrades over the next week as the latest figures, and price movements are assessed by bank analysts.  As I write gold has slipped back below $1630 and ounce (and silver down to $30.25) but investors will be nervously awaiting the opening of COMEX where most of the recent gold price falls have been initiated.

As growth does at last appear to be returning in the U.S. and China in particular, albeit at low levels, investors may be looking to the general markets as providing better opportunities than gold.  However, Europe and Japan remain mired in recession (even Germany is not immune on the latest figures) so it may well be too soon to switch horses yet.  It wouldn’t take too strong an adverse piece of news to reverse the gold price downtrend and there are plenty of worries on the horizon which could develop into something far more serious.

However, the World Gold Council did note in its latest Gold Demand Trends analysis published this week that gold investment did slip back in Q4, although this was countered by a rise in jewellery demand and a particularly big jump in Indian buying, although this is put down to building inventory ahead of imminent gold import tax hikes.