August Comex Gold - No Bubble Here
One thing that was not covered in the BusinessWeek article was the overall size of Soros’ stake in gold wrt the marketplace. By adding another $421 MM to his gold position, he took his entire SPDR Gold Trust corpus to $631 MM.
At today’s price of $1,100 per ounce, that would put the Soros stake at approximately 5,975 contracts had he been trading futures. But since he’s owned his initial stake for quite some time, it’s pretty safe to say that he’s at or over the equivalent of 6,000 contracts – and I stress equivalent because his firm owns shares of the SPDR Trust.
The Position Limit for COMEX Gold futures is 6,000 contracts, with no more than 3,000 contracts being in the expiration month. The 13F that investors with over $100 must file does not include futures contracts. Soros may hold COMEX Gold futures in addition to his SPDR Trust holdings, and if he did, he’d be getting around the position limit guideline.
Soros may not be the risk lover he once was when he and Jim Rogers ran the Quantum Fund. At that time, according to my most recent Jim Rogers podcast interview, Jim said they used excessive leverage to generate their gains.
Why would a sophisticated investor like Sorros purchases gold through an ETF vs. futures? What are the advantages/disadvantages of either strategy?
Good question Ben, I'm going to write a new post to answer.
Why would a sophisticated investor like Soros purchase gold through an ETF vs. futures? What are the advantages/disadvantages of either strategy?
Good question Ben, I'm going to write a new post to answer.