More Hedge Fund Managers Bet On Gold

 Even as gold was approaching record highs during the third quarter, more of the best-known hedge fund managers were placing bets on the precious metal.

Former Goldman Sachs trader Chris Shumway's fund added 2.1 million shares of the SPDR Gold Trust and Dan Loeb's Third Point LLC bought 115,000 shares during the third quarter, according to securities filings on Monday. Highfields Capital added call options on 1.6 million shares of the gold ETF and calls on 200,000 shares of the Market Vectors Gold Miners ETF.

At the same time, some of the early hedge fund gold pioneers were trimming their stakes. George Soros sold over half of one million shares of the gold ETF to finish the quarter with 4.7 million shares, while Eric Mindich reduced his Eton Park Capital's stake by 2 million shares to 4.6 million. John Paulson maintained a 31.5 million share holding of the ETF through the quarter.

Gold has risen sharply this year. The SPDR trust is up 23 percent so far in 2010. Spot gold hit a record of $1,424.10 last week, without adjusting for inflation. Gold would still almost have to double in price to reach its 1980 record after including inflation.

The metal staged its largest one-day drop in 4-1/2 months on Friday, retreating from last week's record on concern the market had become overbought and as talk of a potential interest rate rise in China knocked commodities sharply lower.

Precious metals are of course precious and men and women love them - Gold, Silver, Platinum, Palladium. Crude and Natural Gas keep the world moving. Base Metals - Aluminium, Copper, Lead, Nickel and Zinc are widely used in industry.

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