Holdings in the SPDR Gold Trust, the world’s largest exchange-traded product backed by the metal, fell below 1,000 metric tons for the first time in four years, erasing more than $29 billion from the fund’s value this year.
In 2013, the assets have slumped 351.3 tons, or 26 percent, to 999.56 tons, the lowest since February 2009, according to data compiled by Bloomberg. Holdings reached a record 1,353.35 tons in December. Billionaire John Paulson is the biggest investor in the fund.
Today, gold futures fell to a four-week low after Federal Reserve Chairman Ben S. Bernanke said the central bank may “moderate” the pace of U.S. bond purchases later this year. In 2013, the metal has dropped 18 percent, slumping into a bear market in April, as some investors lost faith in the commodity as a store of value amid low inflation and a global equity rally.
“Inflation remains at a low pace and the easing may end, so there are no real solid reasons to back gold,” Edward Lashinski, the Chicago-based director of global strategy for futures trading at RBC Capital Markets LLC, said in a telephone interview.
This year, the MSCI All-Country World Index of equities has climbed 6.9 percent, and the dollar gained 2 percent against a basket of major currencies.
U.S. government filings in May showed billionaire investor George Soros joined funds run by Northern Trust Corp. and BlackRock Inc. in cutting holdings in SPDR assets in the first quarter. Paulson kept his stake of 21.8 million shares.
Paulson Fund
Paulson posted a 13 percent decline in his Gold Fund last month, according to a letter to investors. The drop brings losses in the strategy to 54 percent since the start of the year, the firm said in the letter, a copy of which was obtained by Bloomberg News.
The Gold Fund is the smallest strategy of the $19 billion money manager, with about $360 million, or 2 percent of assets, most of it Paulson’s own money.
Today, gold futures for August delivery rose 0.5 percent to settle at $1,374 an ounce on the Comex in New York. After the close, the price touched $1,348.30 in electronic trading, the lowest for a most-active contract since May 20.