John Paulson, President of the New York-based hedge fund Paulson & Co, which boasts funds such as Paulson Advantage and Paulson Advantage Plus, personally earned $5 billion dollars in 2010 due to his heavy investing in the gold market. Billionaire John Paulson believes that the Federal Reserve intends to re-inflate every asset it can and so far his hunch has paid off. As of his 2010 filings, John Paulson held $4.37 billion dollars of the GLD Trust which accounts for almost 8%.
John Paulson has a reputation for picking the right horse. In 2008 he bet against four of the five biggest banks in Britain that ended up making his firm almost £280 million. John Paulson started the gold fund in 2009 with the announcement that he wanted a fund that was focused on gold mining stocks and gold-related investments.
Another big player in the gold GLD Trust is billionaire George Soros, Chairman of the Soros Fund Management and Open Society Institute. The Soros Fund Management currently holds $644 million of GLD or around 5.24 shares. George Soros believes that the gold market is the “ultimate asset bubble” and is speculating that gold prices could rise as high as $2000 an ounce. George Soros has made many public predictions in his books, several which have been proven correct.
George Soros did not become a billionaire overnight but has made his reputation for being correct when it comes to currency speculation. He has made his billions by correctly predicting the outcome of events such as the Black Wednesday UK currency crisis in 1992, which earned him an estimated $1.1 billion.
However, into the New Year things may not be looking so good for George Soros and John Paulson. The GLD Trust lost 12% in the month of January with more selling than buying taking place and so far the price of gold is down almost 6%. With heavy investors such as John Paulson and George Soros losing out in the market you can bet that other investors are watching their moves carefully. Gold’s price has turned up in February and has continued to rise steadily into March. At the time of publication gold has reached new highs at $1428.60 per ounce.