Billionaire John Paulson, who lost over $700 million after April’s gold crash, has cut his holdings by half. As one of the last major institutional holders of gold ETFs, Paulson & Co.’s exit may signal the bottom in the gold market we’ve been waiting for.
Two major institutional players also give us reason to be enthusiastic. JP Morgan is advising its customers to go long on gold “with a four-five week time horizon,” citing further supply squeezing in South Africa and seasonal pickup in India:
“Gold supplies could be constrained in September if labor strikes are initiated in South Africa. There’s typically some positive seasonality to the gold price in August/September helped by India, which is still the largest single (28%) gold market.
“Often this strength correlates with the Denver gold conference. The conference attracts many of the larger gold investors, and given the other positives for the metal… we would not be surprised to see a stronger gold price in the run-up to the show.
“We’d encourage shorter-term investors to consider getting long the gold space with a four-five week time horizon.”
And Goldman Sachs recently increased its position in SPDR Gold Trust to 4.4 million shares… more than six times what it held at the end of March.
The market is already taking notice. Spot gold blasted past its $1,350 resistance earlier today and is headed for higher ground.
“It’s been a crazy ride,” says Greg Guenthner in today’s Daily Reckoning, “but the breakout is finally here. I expect gold to continue its volatile rise in the near term.” Greg recommends snatching up mining stocks. Matt Insley over at Daily Resource Hunter recommended mining company Franco-Nevada (FNV) on Aug. 14.
For The Daily Reckoning
P.S. Every morning, Greg Guenthner’s Rude Awakening examines the day’s market moves and shows you where to find opportunities in today’s volatile markets. Click here to get Greg’s tips delivered right to your inbox!
The fall in the gold price will make many investors nervous.The time to hold your nose and buy is approaching.
Jason M. Farrell is a writer based in Washington D.C. and Baltimore, MD. Before joining Agora Financial in 2012 he was a research fellow at the Center for Competitive Politics, where his work was cited by the New York Post, Albany Times Union and the New York State Senate. He has been published at United Liberty, The Federalist, The Daily Caller and LewRockwell.com among many other blogs and news sites.
Thanks in part to Michael Lewis's book Flash Boys, High Frequency Trading (HFT) is front and center for this round of the news cycle. Today, John Rubino continues the discussion, explaing why HFT is so dangerous, and how public awareness of it is affecting something called the "trust horizon." Read on...
As the saying goes, there are two things you never want to see being made: laws and sausages. But to hear David Stockman tell it, there could be a third thing added to that list: how crony capitalists make money. Today, Mr. Stockman gives a complete rundown of how this corrupt system really functions, and why it makes him ill. Read on...
It's earnings season, and that means the "expectations game" is in full swing. Of course, with so much speculation involved, this often ends up being a "contradiction game" between various media outlets. Today, Dave Gonigam explains how to sift through the noise and play a few earnings surprises for big gains. Read on...
If you look at all the measurements, number crunching and financial instruments that are employed at the Federal Reserve, you may come to the conclusion that economics is a science. However, in his speech at the 2013 Agora Financial Investment Symposium, Bill Bonner explains why that couldn't be further from the truth...
Some of the world's most successful venture capitalists and entrepreneurs are moving their money off the stock market. Where is it going? Today, Matt Milner gives a brief explanation of this historic shift in the economy, and why it will redefine the future of nations and boost individual fortunes. Read on...