A Bright Outlook For The Gold ETF (GLD)

3-16-09-gold-125x125“Gold prices had an excellent run last week, led by the extensive fall in the US dollar and strong rally in the equity markets. The rise in crude oil prices also resulted in lifting bullion. The US currency showcased the biggest decline in a month against euro last week as US data showed that the world’s largest economy contracted lesser than forecasts, which hinted that the recession is fading and gave rise to investor demand in riskier counters such as commodities and equities. The outlook is bright – the most active benchmark contract at the Comex has pulled off a strong recovery, ending at $953.70 near the resistance at $960, a break and close of which will take prices towards new highs of $966.70/oz and $970.40/oz, state traders,”  Kishori Krishnan Reports from Gold Investing News.

“Guess who else is buying gold – Touradji Capital Management LP, the $2.7 billion hedge-fund firm founded by Paul Touradji, bought shares of a gold exchange-traded fund in the second quarter and sold stock in EnCana Corp (ECA) and other energy companies. The firm purchased 126,000 shares of the SPDR Gold Trust, the biggest ETF backed by bullion, according to a filing on Monday to the U.S. Securities and Exchange Commission. The shares were worth $11.5 million as of June 30, or 51 per cent of New York-based Touradji Capital’s equity portfolio. Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising prices and participate substantially in profits from money invested,”  Krishnan Reports.

“Gold has drawn other hedge-fund investors in 2009 as bullion prices climb for a ninth straight year. Paulson & Co., run by billionaire John Paulson, became SPDR Gold Trust’s largest holder in the first quarter. It bought an 11.3 per cent stake in AngloGold Ashanti Ltd (ASX:AGG), the biggest African miner of the metal, from Anglo American Plc for $1.28 billion in March. Touradji Capital had equity holdings worth $22.4 million as of June 30, compared with a year-earlier value of $494.2 million for its 10 largest stakes, filings show. The firm sold many of his positions and moved to more than 80 per cent cash in 2008’s second half, according to Touradji,” Krishnan Reports.

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