Monday the rumors of George Soros’s hedge fund, Soros Fund Management, liquidating their position in gold & silver were confirmed by first quarter SEC filings. Soros held $774 million in gold holdings at the end of the 4th quarter 2010. According to the current filing he is at less than $7 million.
This makes sense when you consider that Soros position was to hedge against deflation. It’s pretty hard to make the case for deflation right now so if that was a reason you were buying gold, you should take this signal from Soros, Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh told CNBC.
Soros current position, at one tenth of his previous value, may have contributed to the current retraction in metals. Many experts see his repositioning as the canary in the gold-mine, spelling doom on the current values of gold & silver. Except at the current global valuation of gold, around $8.5 trillion, the $768 million sell off by Soros is less than one tenth of one percent. Far out stripping Soros sell off is the total net purchases all the central banks.
The fundamentals for metals is strong, with the underpinning of demand, US National Debt, emerging markets & inflationary worries metals will continue to move forward. Metals traditionally enter a period of retraction during the summer months, meaning the next couple of months may see metals languish at current levels. This makes for an opportunity to strengthen your position in metals.
Take the time to look into your Tangible Asset Portfolio and consider adding during this current retraction. While George Soros position is something to be watched it is not Chicken Little and the sky is falling – Or maybe it is just that.