Browsing all articles tagged with Fund
Apr
25

Gold Rise to 1 Week High, Central Bank Purchases Hold up

Bullion climbed to its highest in more than a week on Thursday, enhanced by prospects of more central bank buying following a recent steep sell off in the gold, as a firmer euro also underpinned prices.

Turkey and Russia raised their gold reserves in March, the International Monetary Fund stated on Wednesday raising their holdings ahead of the spectacular plunge in prices this month that shocked ardent yellow metal investors and bulls.

Central bank purchases and surging physical demand helped precious metal bounce from a two year trough about $1,321 per ounce hit previous week. However daily outflows from exchange-traded funds, reflecting sagging investor confidence capped gains.

Gold reversed early losses and stood at $1,445.56 per ounce by 0621 GMT, climbed $14.76. It strike a high of $1,447.66 per ounce earlier in the session its loftiest since April 15 the day it posted its largest ever daily slump in dollar terms.

Bullion is torn between an increase in demand for jewellery and coins, and investors in ETFs cutting exposure because they became gradually more convinced the US Federal Reserve will look to end its bullion friendly bond buying programme by the end of 2013 or beginning of 2014.

Joyce Liu, an investment analyst at Phillip Futures in Singapore said if the price breaks above $1,447-$1,450 levels, there will be more upward momentum. If it does not we may see a further dip in precious metal prices.

Premiums for gold bars soared to multi year highs in Asia following a spate of physical buying ran down supplies, with dealers in top consumer India expecting a surge in imports this month.

Holdings of the greatest gold backed ETF, New York’s SPDR Gold Trust slump 0.38 percent on Wednesday from Tuesday, their lowest since late 2009.

Dealer in Singapore said strong physical buying in China is overflowing into Hong Kong. I heard if you have gold bars now people will buy them at $2.50 to $3.00 premiums.

US gold for June delivery climbed more than 1 percent to as high as $1,447.50, its largest since April 15, however some dealers cautioned the current rebound in cash and gold futures was far from sustainable.

Gold futures rise on Thursday in electronic trade, on track for a second consecutive proceed supported by strengthening physical demand for the gold and downbeat US economic figures.

Apr
20

Paulson’s Advantage Fund Hurt by Fall in Gold

Hedge fund billionaire John Paulson’s best-known fund losing 2.4 percent in April, mostly due to the sharp sell-off in precious metal. The Paulson & Co Advantage fund is making money for the year however just barely with a 1.3 percent addition.

Gold is one of the worst performing assets this year following rising mightily following the financial crisis. The precious metal has dropped 17 percent this year including a 13 percent fall in April alone.

The fund’s significant holdings in numerous gold mining stocks, including a bet on AngloGold Ashanti Ltd, which is losing 40 percent this year, have considerably cut into the Advantage fund’s returns.

The sharp fall appears to have caught a number of hedge fund managers like Paulson by surprise. Coming week he intends to update his clients regarding all of his funds, including a fund dedicated specially to investing in gold.

Shares of companies tied to the performance of yellow metal, including the SPDR Gold Trust the largest gold exchange traded fund also have plunged sharply. Financial information firm Markit said this year investors have pulled $10 billion out of the precious metal ETF as of Wednesday.

The fund manager, lionized following a big bet against the overheated housing market in 2007 that made golds for his investors, has floundered trying to replicate the success in recent years.

Paulson, who has made money on bullion up until this year, has long held firm to the view that inflation will ultimately rebound, making yellow metal a prudent hedge. However in the wake of the selloff the firm has sustained losses in the hundreds of millions of US dollars in several funds that invest in yellow metal.

Assets at his firm have slumped to $18 billion down from $38 billion in early 2011 due to redemptions and poor performance. Over the past two years the Advantage fund and a leveraged version of the fund have posted some of the most horrible numbers in the $2.2 trillion hedge fund industry.

At the end of the first quarter, the Advantage policy, which includes the two funds and managed accounts had almost $4.6 billion in assets.