Jason Farrell

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.

Jason Farrell

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!

You May Also Like:


A 2-Pronged Approach to Cashing In On Gold

Matt Insley

As Janet Yellen gets set to take over as the head of the Federal Reserve, it appears there will be no slow down in to quantitative easing. And that could have serious repercussions for gold investors. Matt Insley explains his two-pronged approach to gold investing, no matter what the new Chairwoman does. Read on...

Jason Farrell

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.

Recent Articles

The US Debt Crisis that Will Never Happen

Chris Mayer

One of the most heated political battles raging across the western world is debt versus austerity. In the U.S. this debate reached it's apex in 2011 when the U.S. credit rating was downgraded by Standard and Poor's. In today's essay, however, Chris Mayer throws the debate out the window, explaining why he thinks a U.S. debt crisis will never happen...


3 Tips to Finding Small Companies With Huge Potential

Matthew Milner

Believe it or not, more capital for a company doesn't necessarily mean better returns for investors. In fact, in a recent study that dug through data from more than 200 acquisitions going back to 2006, they found a "sweet spot" for the most likely acquisition targets. And it's lower than you think. Matthew Milner explains...


Disruptive Innovation Will Change How You View Obamacare

Greg Beato

The Affordable Care Act dumped 2,000 pages of regulations into the health care sector, stifling any innovation that could have brought about real cost savings. But even with these obstacles, there are still people looking for ways to do things better and at a lower cost. These new technologies could be the key to fixing health care in America...


Why Old-School Tech Stocks Are Beating Social Media

Greg Guenthner

While many of the newer social media stocks struggle for gains this year, old-school tech stocks have become some of the best trades on the market. With the rare exception (Facebook is doing well—shares are up 26% year-to-date) the social stocks are in the gutter. They got off to a fast start in January and Februray, but ran out of steam in the spring. Aside from a few feeble attempts, few have posted anything close to a noteworthy comeback. Twitter, LinkedIn, and Groupon are all down double-digits year-to-date. Groupon—the worst performer on this short list—is down 47%. On the other had, the biggest of the big tech stocks on the market are helping traders pile up even larger gains right now. Greg Guenthner explains…


Video
Creditism and the Threat of a New Depression

Richard Duncan

In the 1960s, total credit in the U.S. broke the one trillion dollar mark...and since then, it has expanded over 50 times. But now, as Richard Duncan explains, the explosion of credit that's made America prosperous, threatens to take the entire economy down. And that could mean the return of another depression...