By Nicholas Larkin and Glenys Sim
Aug. 16 (Bloomberg) -- Gold gained for a second day in London as concern over slowing economic growth boosted demand for the metal as a protection of wealth. John Paulson maintained the largest stake in the SPDR Gold Trust in the second quarter.
The German economy, Europe’s largest, almost stalled in the second quarter as the region’s sovereign-debt crisis weighed on confidence. Paulson & Co. kept 31.5 million shares in the SPDR Gold Trust at the end of the second quarter, now valued at $5.4 billion, according to a filing with the Securities and Exchange Commission. Billionaire George Soros and Eric Mindich cut their holdings in the exchange-traded product in the quarter.
“There are still far too many macro uncertainties at the moment with softening economic readings,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “The short-term outlook for gold remains positive.”
Immediate-delivery gold rose $11.45, or 0.7 percent, to $1,777.30 an ounce by 9:45 a.m. in London. The metal touched a record $1,814.95 on Aug. 11. Gold for December delivery was up 1.2 percent at $1,779.30 an ounce on the Comex.
Paulson is the biggest investor in the SPDR Gold Trust, the largest ETP backed by gold. Soros Fund Management LLC held 42,800 shares as of June 30, compared with 49,400 at the end of the first quarter, while Mindich’s Eton Park Capital Management LP cut its stake to 813,000 shares from 2.328 million, separate filings showed. Eton Park and Steven A. Cohen’s SAC Capital Advisors LP bought call options inked to the SPDR Gold Trust in the period.
Gold Holdings
Holdings of the metal in ETPs rose 3.8 metric tons to 2,185.9 tons yesterday, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons last week as Standard & Poor’s cut its U.S. credit rating and as speculation that Europe’s sovereign-debt crisis may be worsening fueled demand for gold.
Germany’s economy grew 0.1 percent from the first quarter, less than the 0.5 percent figure forecast by economists. France’s recovery unexpectedly ground to a halt in the second quarter, Italian and Spanish expansion remained sluggish and Greece’s economy contracted.
Gold is up 25 percent this year, heading for an 11th straight annual gain, the longest winning streak since at least 1920 in London. The MSCI All-Country World Index fell 7.3 percent this year, the Standard & Poor’s
GSCI Index of 24 commodities rose 2.5 percent, while Treasuries returned 6.5 percent in 2011, a Bank of America Merrill Lynch index showed. Bullion yesterday dropped to as low as $1,728.40.
More Buyers
“We’ve seen physical buyers come back into the market and inquiries have picked up as prices fell toward the $1,730, $1,720 level,” said Liu Yangyi, a manager at China National Pearl Diamond Gem & Jewelry Import & Export Corp. The company is a member of the Shanghai Gold Exchange, China’s largest physical market. “Physical buyers are adjusting to higher prices.”
Silver for immediate delivery fell 0.9 percent to $39.5225 an ounce. Palladium slipped 0.3 percent to $747.25 an ounce. Platinum was up 0.5 percent at $1,818.75 an ounce after earlier today reaching $1,824.50, the highest price since June 13.
Michael Vachon, a spokesman for Soros, didn’t immediately respond to a voicemail left by Bloomberg outside normal business hours requesting comment. Armel Leslie, a spokesman for Paulson, declined to comment on the second-quarter holdings. Mindich of Eton Park declined to comment.
--Editors: Claudia Carpenter,
To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.