George Soros: Nothing Is Very Safe, Including Gold (GLD, GDX, GDXJ, SGOL, UGL, DGL, DGP, IAU, DZZ, GLL, UBG, DGZ)

Spot gold Tuesday hit a record $1,274.75 an ounce,drifted lower on Wednesday as the dollar surged 3% against the yen when Japan intervened in the currency market for the first time in six years. The yellow metal quickly found support at just below $1,270 an ounce, still near its record high.

Gold was also weighed down by fresh comments from billionaire financier George Soros. In an exclusive interview on Sep. 15 with Thompson Reuters (clip below), Soros says that gold is the ”ultimate bubble,’ and that “this is a period of great uncertainty so nothing is very safe.

“[In a deflationary environment], Gold is the only actual bull market currently. It just made a new high yesterday. In the present circumstances that may continue.  It will be very interesting to see if there is a decline in the next few weeks because practically everything that makes a new high almost immediately afterwards reverses and disappoints.”

“I called gold the ultimate bubble which means it may go higher but it’s certainly not safe and it’s not going to last forever.”

Soros first made the “ultimate bubble” comment on gold back in January at the World Economic Forum in Davos, Switzerland.  However, his hedge fund–Soros Fund Management LLC–still held 5.24 million shares of the SPDR Gold Trust (NYSE:GLD), a stake worth about $650 million, and equity holdings in miners of gold and other minerals worth almost $250 million as of June 30.  Soros was the third-largest fund in the Gold Trust ETF at the end of the second quarter.

So, it seems Mr. Soros still sees upside in gold, but was warning of the metal’s volatility instead of a bubble burst. Fundamentally, the current global macro environment–prospect of a synchronized slowing growth coupled with ongoing financial turmoil– and supply/demand are also quite supportive of gold.

From a technical standpoint (see chart), $1,300 range looks to be the next resistance with support at around $1,255.

ETF Daily News Notes These Related Gold ETFs: SPDR Gold ETF (NYSE:GLD), Market Vectors Gold Miners ETF (NYSE:GDX), Market Vectors Junior Gold Miners ETF (NYSE:GDXJ), ETFS Physical Swiss Gold Shares (NYSE:SGOL), Ultra Gold ProShares (NYSE:UGL), PowerShares DB Gold (NYSE:DGL), PowerShares DB Gold Double Long ETN (NYSE:DGP), iShares COMEX Gold Trust (NYSE:IAU), PowerShares DB Gold Double Short ETN (NYSE:DZZ), UltraShort Gold ProShares (NYSE:GLL), UBS E-TRACS CMCI Gold TR ETN (NYSE:UBG), PowerShares DB Gold Short ETN (NYSE:DGZ).


 
About: Economic Forecasts & Opinions The theory of quantum mechanics and Einstein’s theory of relativity (E=mc2) have taught us that matter (yin) and energy (yang) are inter-related and interdependent. This interconnectness of all things is the essence of the concept “yin-yang”, and Einstein’s fundamental equation: matter equals energy.  The same theories may be applied to equities and commodity markets. All things within the markets and macro-economy undergo constant change and transformation, and everything is interconnected.  That’s why here at Economic Forecasts & Opinions, we focus on identifying the fundamental theories of cause and effect in the markets to help you achieve a great continuum of portfolio yin-yang equilibrium.

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