Gold Holds Above $1,600, Hedge Funds Still Interested

On Friday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, fell $26 to settle at $1,609.50 per ounce, while silver (NYSEARCA:SLV) futures for March dropped 50 cents to close at $29.85. It was gold’s lowest close in about six months.

Both precious metals received heavy selling pressure as headlines hyped the disclosure that Soros Fund Management sold 720,400 shares of the SPDR Gold Trust (NYSEARCA:GLD) during the fourth quarter. However, other funds are still keeping a large interest in gold.

Billionaire fund manager, John Paulson, who is known for betting against subprime mortgages during the housing bubble, held 21.8 million shares at the end of December, unchanged from the previous quarter, and higher than the 17.3 million shares held in the beginning of 2012.

Interestingly, Paulson added a new position in Freeport-McMoRan Copper & Gold (NYSE:FCX) of 9 million shares, worth more than $300 million at the end of 2012. George Soros’ fund also added to its Freeport position in the fourth quarter.

David Einhorn’s Greenlight Capital showed an unchanged position in Barrick Gold (NYSE:ABX) and the Market Vectors Gold Miners ETF (NYSEARCA:GDX) of $68.9 million and $278.6 million, respectively.

By the end of the trading day, the SPDR Gold Trust fell 1.6 percent, while the iShares Silver Trust (NYSEARCA:SLV) dropped 2.1 percent. Gold miners such as Barrick Gold and Yamana Gold (NYSE:AUY) fell 2.4 percent and 3.5 percent, respectively. Silver names such as First Majestic Silver (NYSE:AG) and Hecla Mining (NYSE:HL) both declined more than 3 percent.

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Disclosure: Long EXK, AG, HL, PHYS