As gold rallied again in the fourth quarter of 2012, several Gurus who had tremendous holdings in the metal began unloading, namely macroeconomic trader George Soros and Lone Pine’s Steve Mandel. John Paulson chose to maintain his position. Both Soros and Paulson have read economic signs and traded at just the right times to reap profits and avoid losses on gold in the past, adding significance to their recent decision.
Only one Guru, Jeremy Grantham, significantly increased his holding.
Sellers: George Soros
George Soros, who made his initial fortune shorting the British pound, has judged the movement of gold quite accurately in recent years. He amassed more than 6 million shares of the SPDR Gold Trust ETF (GLD) in the latter half of 2009, the base of its historic multi-year run up, around $940 and $1,078 a share. He sold off much of the holding as the price increased, and had reduced almost all of it by the second quarter of 2011, when the price reached $1,470 on average.
Though gold went up for one more quarter, and touched its all-time high of $1,923.70 in the third quarter, it began to fall again, and was down to roughly $1,500 by the end of the year.
But Soros foresaw another rally in gold’s future, and began buying again, building his stake to 1,320,400 shares in the third quarter of 2012. Again, he sold at approximately the peak, reducing almost 55% of the stake in the fourth quarter, which contained its 52-week high of $1,741. Gold shares had tumbled to $1,550 by Wednesday, Feb. 27, 2013.