(Kitco News) – Despite its criticism of being an outdated relic, billionaires appear to be taking a new interest in gold.
Michael Burry’s Bet on Gold
According to updated regulatory filings, Michael Burry’s Scion Asset Management is now betting big on precious metals. In the first quarter, Burry bought 444,000 units of the Sprott Physical Gold Trust (PHYS), which is valued at more than $10 million. This represents slightly more than 7% of Scion’s total holdings.
Burry jumped into gold as prices surged to record highs above $2,200 an ounce. Since then, gold has continued to rally, reaching above $2,448 an ounce last month.
The 13F filing does not specify when Burry acquired his stake in PHYS, but the average price in the first quarter was around $2,130 an ounce. Gold prices have since risen more than 11% from that level.
Michael Burry, known for predicting the 2008 housing market crash, is now gaining attention for his gold investment.
Other Billionaire Investors Bullish on Gold
Ray Dalio, another billionaire investor, recently mentioned his holding of gold as a portfolio diversifier. He views gold as “good money” in contrast to fiat currencies susceptible to devaluation through default or inflation risks.
In addition, David Einhorn’s Greenlight Capital has been a longstanding gold bull. The hedge fund purchased $74 million worth of shares in the world’s largest gold-backed ETF, SPDR Gold Shares (NYSE: GLD), in the fourth quarter of last year. Although Greenlight Capital reduced its GLD position by 10% in the first quarter of this year, the holdings are still worth nearly $74 million.
Scion’s Other Investments
Aside from gold, Burry’s firm is also increasing its bets on China. In the first quarter, Scion raised its exposure to JD.com Inc. and Alibaba Group Holding Ltd. The fund’s position in JD.com grew by 80%, valued at $9.9 million, while its stake in Alibaba increased by 67%, now valued at $9 million.
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Additional Insight:
The recent surge in gold prices has not only attracted the attention of billionaire investors like Michael Burry, Ray Dalio, and David Einhorn but has also brought more focus on the role of gold as a safe-haven asset in times of economic uncertainty. The current economic climate, marked by the impact of the global pandemic and unprecedented government stimulus measures, has underscored the hedging benefits of gold in an investment portfolio. As a tangible asset with intrinsic value and a historically proven track record as a store of wealth, gold continues to play a significant role in the strategies of prominent investors looking to safeguard their wealth against market volatility.
