Soros Dumps Gold, Inciting Fear of Plummeting Price

By:  Joe Wolverton, II
08/08/2011
       
Soros Dumps Gold, Inciting Fear of Plummeting Price

George Soros, the hedge fund investor who called gold "the ultimate bubble," has divested his portfolio of nearly its entire investment in the precious metal, inciting many to fear that the price will very soon plummet, devaluing the specie-heavy portfolios of millions of investors.

Like it or not, like him or not, attention must be paid to his movements. It can be very expensive to ignore the predictions of Soros. For example, on September 16, 1992 (a date subsequently known as “Black Wednesday”), one of the investment funds of Soros sold short more than $10 billion worth of pounds sterling, profiting from the British government's reluctance to adjust its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries.

George Soros, the hedge fund investor who called gold "the ultimate bubble," has divested his portfolio of nearly its entire investment in the precious metal, inciting many to fear that the price will very soon plummet, devaluing the specie-heavy portfolios of millions of investors.

Like it or not, like him or not, attention must be paid to his movements. It can be very expensive to ignore the predictions of Soros. For example, on September 16, 1992 (a date subsequently known as “Black Wednesday”), one of the investment funds of Soros sold short more than $10 billion worth of pounds sterling, profiting from the British government's reluctance to adjust its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries.

Defiantly, the UK withdrew from the European Exchange Rate Mechanism, triggering an unsettling devaluation of the pound. Not everyone was harmed by this plummet, however. George Soros earned over $1 billion in the ordeal.

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Photo: George Soros at the World Economic Forum Annual Meeting 2010

 

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