Ray Dalio’s faith in gold unshaken even amid investor exodus

Ray Dalio – Image courtesy of Wikimedia Commons

Not even gold’s second straight quarterly decline was enough to shake billionaire hedge-fund manager Ray Dalio’s confidence in gold.

Dalio recommends gold as hedge against rising political risk.

Dalio’s Bridgewater Associates maintained its holdings in SPDR Gold Shares, the largest bullion-backed ETF, at 3.9 million shares, and its stake in iShares Gold Trust, the second-largest, at 11.3 million shares in the third quarter, according to a regulatory filing Tuesday.

Bridgewater stayed loyal to bullion even amid an investor sell-off that sent assets in bullion-backed ETFs tracked by Bloomberg tumbling by 2.79 million ounces in the third quarter, the first such decline since the end of 2016. The precious metal’s haven appeal has waned as the dollar rallied and borrowing costs rose in the U.S., making non-interest bearing assets less competitive.

The hedge fund also added to its holdings in Barrick Gold Corp., Franco-Nevada Corp., Newmont Mining Corp. and Kinross Gold Corp. in the third quarter. In the same quarter, Bridgewater pared its stake in bullion producers including Yamana Gold Inc. and Eldorado Gold Corp.

Filings released this month don’t include hedge funds’ current position, which may have changed since the end of the quarter. Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.

(By Luzi Ann Javier)