Gold steadies as Eton Park buys, Soros takes bullion miner stake

Singapore - Gold was little changed for a second day as billionaire George Soros and Eton Park Capital Management joined the slew of investors piling into bullion.

Soros Fund Management bought a $264m stake in the world’s biggest producer Barrick Gold Corp. in the first quarter, while Eton Park, the hedge-fund firm founded by Eric Mindich, spent $422m buying shares in the SPDR Gold Trust. Holdings in gold-backed funds jumped the most in seven years in the quarter and rose another 3.4% since then.

While billionaire John Paulson cut his stake in the SPDR product, other money managers including Paul Singer and Stan Druckenmiller are bullish. Prices rallied 20% this year as the Federal Reserve scaled back expectations for interest-rate rises and after borrowing costs turned negative in Europe and Japan.

"I’m not surprised the big institutional players are coming back to the metal given the outlook for US interest rates and bumps in stock markets earlier in the year," Neil Meader, a London-based analyst at Metals Focus, said by phone.

"It’s still not impossible to have some short-term pullback but it may not be as much as some people were expecting."

Gold price

Gold for immediate delivery lost 0.2% to $1 271.56 an ounce, according to Bloomberg generic pricing. It climbed above $1 300 to the highest in more than a year on May 2.

Holdings in exchange-traded products retreated on Monday from the highest since December 2013, data compiled by Bloomberg show. They fell 1 metric ton, the first drop in 15 sessions, to 1 821.3 tons.

Paulson, which uses the SPDR product to back the funds’ gold-share classes, retreated from the metal for a second quarter, a government filing showed. In contrast, Joh. Berenberg Gossler plans to increase its holdings of gold and other precious metals, betting that demand will be lifted by uncertainty surrounding the outcome of the US elections and the vote on UK membership of the European Union.

“Gold is the ultimate safe haven that protects investors from currency and economic instability,” Gavin Wendt, director and senior resource analyst at MineLife in Sydney, said by e-mail.

In other metals:

Silver was little changed at $17.12 an ounce in London. Platinum declined 0.3% and palladium fell 0.6%.