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Bill Gross: ‘I would still buy gold here’

Still believes in gold as hedge against inflation

Bill Gross, founder of Pimco, whose various funds oversee more than a $1 trillion in assets, at a February roundtable discussion at investment site Barron’s described gold as a “decent hedge” as central banks around the world continue with quantitative easing.

Gross puts his money where his mouth is and like your average gold bug has made a huge bet on the Federal Reserve’s QE program continuing for a long time still.

The $289 billion Pimco Total Return Fund’s exposure to Treasuries and Treasury-related securities and US mortgage debt, the favourite choice for purchases under QE, is 66% of the fund’s total assets.

Here’s what Gross tweeted today in response to gold’s fall:


Despite gold’s meltdown over the last two trading session, the metal is still up  more than 60% since Fed chairman Ben Bernanke announced the first round of asset purchases under QE in December 2008.

The Fed’s balance sheet topped $3 trillion at the start of 2013 and is set to reach $4 trillion by the end of the year.