Investors Are Following George Soros Into The Gold Market
There’s a new gold rush going on, and one 85-year-old billionaire is leading the pack of hungry investors that believe the yellow metal is the next big thing. George Soros, the man that bet the UK would have to devalue the pound sterling back in 1992, and won more than $1.3 billion for himself, and $7 billion for his hedge fund is back making headlines for a risky financial move. Soros realized that the gold market was weaker than expected at the beginning of 2016 and he decided to take advantage of that weakness by reducing his hedge fund’s position in stocks by 37 percent and buying more than 19 million shares of Barrick Gold. Barrick Gold is one of the largest miners of precious metals in the world.
Since Soros placed his bet on gold mining, Barrick Gold’s stock jumped 44 percent, according to Bloomberg.com. George Soros personal worth is somewhere in the neighborhood of $24,2 billion, and that could change drastically this year if the price of gold jumps to more than $1400 an ounce as some experts have predicted. But it’s not just gold that is going to line his pockets with more money. Soros bet that the Chinese will have to devalue their currency. That is another risky but possible winning bet.
The Chinese government is pumping capital reserves into their banking system at an alarming rate in order to cover the $2.4 trillion in corporate loans that George Soros believes are bad loans. China is intentionally keeping bad debts and corporate losses alive in order to save face, according to Soros. George thinks that will have to stop sooner than later, and when it does the yuan will take the hit on the foreign exchange market. Soros has placed a bet that will happen in the next 18 months.
The other major bet that is turning out to be a winner for Soros is his investment in Argentina. Argentina bonds are back thanks to the new president of the country, Mauricio Marci. Soros invested in Argentina bonds before Macri was elected, and that gamble has produced som hefty returns. The Soros hedge fund participated in Argentina’s recent $16.5 billion bond offering and Soros thinks that is going to be a winning bet as well since the old investment in the country’s bonds has returned more than 20 percent.
The Soros fund made more than $1 billion from November 2012 to February 2013 betting that the Japanese yen would depreciate, and Soros thinks his new bets on gold, China, and Argentina are going to produce more money for his hedge fund and his personal bank accounts. Soros has been right more than he’s been wrong in the investment world, so hungry investors are following Soros like a mother duck crossing the road.
Learn more about George Soros: