Billionaire investor John Paulson stated in a CNBC interview on Wednesday that gold remains in the early stages of a long-term bull market, as the precious metal consolidates above $4,100 an ounce. Paulson, founder of Paulson & Co., attributed the outlook to declining confidence in paper currencies and sustained central bank demand for gold as a reserve asset. Surveys published last month showed central banks continue ranking gold among their preferred reserve holdings amid an increasingly fragmented global financial system.
Paulson Cites Fiat Currency Concerns and Central Bank Demand
Paulson told CNBC that gold's appeal as an alternative to paper currencies will continue growing as faith in fiat systems erodes. "As people lose faith in paper currencies, gold as an alternative will continue to grow," he said. He emphasized that strong central bank purchases remain a key driver, stating, "Gold is becoming the most apt reserve currency in the world, replacing fiat currencies."
Paulson Shifts Portfolio from Physical Gold ETFs to Mining Equities
Paulson's investment strategy has evolved significantly over the past 15 years. In 2009, he began acquiring shares of SPDR Gold Shares (NYSE: GLD), the world's largest gold-backed exchange-traded fund, accumulating approximately 31.5 million shares by 2011. He exited physical gold positions by the second quarter of 2022. His hedge fund's 13F filings with the U.S. Securities and Exchange Commission, released in May, reveal a $3.11 billion portfolio now concentrated almost entirely in gold and precious-metals mining companies. Paulson stated that investors stand to gain more from gold mining equities than bullion itself, with a primary focus on junior exploration companies. "I think the greatest way to invest is to invest in early-stage gold stocks," he said.
NOVAGOLD Acquires Paulson's 40% Donlin Gold Stake in All-Share Transaction
Paulson's comments on Wednesday followed NOVAGOLD's announcement of definitive agreements to acquire his 40% interest in the Donlin Gold project through an all-share deal. Under the transaction terms, NOVAGOLD shareholders will own approximately 65% of the combined company, while Paulson's hedge fund will hold an economic interest of roughly 40%. His voting power will be capped at 19.99%, and he will serve as Co-Chair alongside NOVAGOLD Chairman Thomas Kaplan. Donlin Gold contains approximately 40 million ounces of measured and indicated resources at an average grade of 2.22 grams per tonne, more than double the global average for comparable projects, according to the company. "I think the best way to play gold is through stocks like NOVAGOLD, if not NOVAGOLD itself," Paulson said. Greg Lang, NOVAGOLD's President and CEO, told Kitco News in an interview that the agreement will streamline the company's operations as it focuses on updating the project's feasibility study.
FAQ
What is John Paulson's current view on the gold market?
John Paulson stated in a CNBC interview on Wednesday that gold is in the early stages of a long-term bull market, driven by declining confidence in paper currencies and strong central bank demand for the metal as a reserve asset.
How has Paulson's gold investment strategy changed over time?
Paulson began buying shares of SPDR Gold Shares (NYSE: GLD) in 2009, holding approximately 31.5 million shares by 2011, but exited physical gold positions by the second quarter of 2022. His $3.11 billion portfolio, as disclosed in May 13F filings, is now concentrated almost entirely in gold and precious-metals mining companies, with a focus on junior exploration firms.
What are the terms of the NOVAGOLD-Paulson Donlin Gold transaction?
NOVAGOLD announced definitive agreements to acquire Paulson's 40% interest in the Donlin Gold project in an all-share transaction. Post-deal, NOVAGOLD shareholders will own approximately 65% of the combined company, Paulson's hedge fund will hold an economic interest of roughly 40% with voting power capped at 19.99%, and Paulson will serve as Co-Chair with NOVAGOLD Chairman Thomas Kaplan.
