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George Soros Makes Another Big Move on Gold

May 17, 2016 at 20:35 by Andriy Moraru

Billionaire investor George Soros recently announced that in this year’s first quarter, he acquired 1.05 million shares of SPDR gold trust — and investment representing some $123 million. The investor has publicly worried about another financial crisis in the style of 2008 and appears to be hedging his bets against the stock market.

The move serves as another indication that gold demand is soaring sky-high, with the World Gold Council recently reporting that the first quarter of this year saw gold demand at its second highest-ever level. “This increase was driven by huge inflows into exchange traded funds (ETFs),” wrote the gold council — an inflow partially due to Soros’ investment.

What Effect Will This Have on Gold Prices?

The laws of supply and demand dictate that increased gold demand could drive up prices—and so far this year, gold has been up. Consulting an interactive price chart at the World Council shows the price of gold up some 18% on the year.

The more publicity is given to major moves toward gold — we have also seen China make big moves in gold recently — the less time investors have to figure out that demand is poised for a strong 2016.

Why Is George Soros Betting Against the S&P?

According to CNN.com, Soros’ moves toward gold and away from the stock market suggest he is “bracing for a stock market storm.” Not only did Soros invest in the ETF, but also purchased shares of Barrick Gold.

CNN noted that Soros’ alarmism about the state of the Chinese markets makes him believe that the world economy may be teetering on the edge. Said Raul Moreno, behind the iBillionaire app, “Soros has made money in markets going up or down so people definitely trust what he’s saying.”

Although most single investors don’t have the capacity to alter the price of a commodity by themselves, if anyone is an exception to the rule, it might be a billionaire like Soros. Gold is slightly up in its price since the weekend and had briefly spiked on Monday before falling back below $1,275 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

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