How come George Soros is buying gold?

“Gold is always a safe haven at times when risks for investors are escalating. It’s better to sit out turbulence with gold,”.

This is the standard remark from most economists when it comes to gold. But earlier this week we saw Soros taking a whopping US$264 million bet on gold by buying this amount of shares in the Canadian gold miner which is effectively increasing his stake in the company by 1.7%.

Whilst not all of Soros bets pay off, he does have a bit of form on some of his macro economic trades, so what is he thinking.

As a Hungarian born Jew, who had to flee Budapest for London just prior to the beginning of the World war two he has a quite an historical interest in Europe, the Euro currency and the EU itself. So, is this bet on gold another way of betting against the Euro and the EU unravelling?

As he recently said in an interview “The EU is on the verge of collapse. The Greek crisis taught the European authorities the art of muddling through one crisis after another. This practice is popularly known as kicking the can down the road, although it would be more accurate to describe it as kicking a ball uphill so that it keeps rolling back down.”

It is well known that Soros believes that we are about to have a rerun of the 2008 crisis, wether this is triggered by a Chinese Yuan revaluation or Italy leaving the Euro, there certainly seems to be a number of risks out there at the moment.

 

 

 

 

About the Author

Ralph HazellRalph is CEO of The Real Asset Company, and was previously a trader and market maker in the fixed income and commodity markets for over 10 years. He was a founding partner of Trafalgar Financial Futures in Gibraltar, and of Jebel Tariq Trading in Dubai, which was the first company to automate market making in gold futures on the DGCX Dubai Gold and Commodities exchange. He is passionate about gold’s vital role within the financial system, and has been investing in gold since 2000. He set up The Real Asset Company as a service he would choose himself.View all posts by Ralph Hazell