Investors Optimistic About Gold Price Prospects, Here's Why

Gold prices continue to hold gains above US$ 4,100 per troy ounce. Although the price is consolidating at a critical support level, a prominent investor is optimistic that the rally will strengthen again in the near term. Billionaire John Paulson, founder of investment management firm Paulson & Co, said he believes gold prices are still in the early stages of a long-term bull market. “As people lose faith in paper currencies, gold as an alternative will continue to grow,” Paulson said in an interview with CNBC. He added that further gains in the gold price will continue to be supported by strong central bank demand. “Gold is becoming the most appropriate reserve currency in the world, replacing fiat currencies,” he stated. Although Paulson has been one of the most prominent gold advocates over the past two decades, his investment focus has shifted in recent years. In 2009, the investor began buying shares of the world’s largest gold investment fund, SPDR Gold Shares (NYSE: GLD), and by 2011 he held approximately 31.5 million shares. He exited the physical gold business in the second quarter of 2022. He is currently focused on investing in gold mining company stocks. His hedge fund’s 13F filing with the US Securities and Exchange Commission, released in May, showed that his US$ 3.11 billion investment portfolio is now built almost entirely around gold and precious metals mining companies. Paulson believes investors will benefit more from owning mining company stocks than gold bullion. He added that his primary focus is on junior exploration companies. “I think the best way to invest is to invest in early-stage gold stocks,” he said.