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Why Is George Soros Buying Gold?

By The Real Asset Company (Will Bancroft)CommoditiesMay 20, 2016 10:08AM ET
Why Is George Soros Buying Gold?
By The Real Asset Company (Will Bancroft)   |  May 20, 2016 10:08AM ET
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“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 George 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.

Why Is George Soros Buying Gold?

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Why Is George Soros Buying Gold?

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Brad Smith
Brad Smith May 23, 2016 11:53AM GMT
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Thank you for this piece Will. I don't always agree with what Soros says but at the very least, he is correct on Greece along with the respective can / ball metaphor. Greece has been struggling and making sacrifices to pay off debt but they still require substantial bailouts. Their economy is still in shambles and the deals with their lenders have not changed this situation. Some of the deals might even have adverse effects such as raising their taxes sky high. There is no way this will promote any economic stability and/or growth.
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