On Friday, May 17th, gold futures dropped to $1,358.30 per ounce; retracing its steps from a high of $1,920 per ounce in September 2011. Year to date, it has dropped about 18% on the COMEX in New York. Money managers such as BlackRock, Northern Trust, Farallon Capital Management, Whitebox Advisers and Soros Fund Management have reduced or hedged against gold as represented by the exchange traded product: SPDR Gold Trust.
BlackRock and Northern Trust sold more than 50% of their holdings and Soros Fund Management sold 12% as of March 31, 2013. This follows a quarter where Soros Fund Management sold 55% of their gold position. Whitebox Advisors sold 90% of their smaller position. Farallon Capital Management used put options on the SPDR Gold Trust as their negative view.
On a high level, the number of short futures and options contracts on gold is growing. According to EPFR Global of Cambridge, Massachusetts, $21.1 billion in gold and gold-related funds have been sold by investors.
On the other hand, Paulson & Company, Schroder Investment Management Group and Elliott Management have held onto or bought SPDR Gold Trust. They are looking at increased demand from India and China as a catalyst for a recovery in the asset.
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