John Paulson has recently been stacking up his gold holdings. According to a recent SEC filing, Paulson bought $1.3 billion in SPDR Gold Trust and has large stakes in Goldcorp, Silver Wheaton and Yamana Gold. Paulson also revealed he has a 1.3 million share stake in Agnico Eagle Mines. [youtube]http://www.youtube.com/watch?v=Vunt3YfYfQE[/youtube] Why did Paulson make this move in the face of falling gold prices? For one thing, Paulson has recently expressed concerns about rising inflation. This move could also be due to the upcoming Swiss Gold Referendum vote which will take place at the end of November. Even if the initiative fails, this event will cause a lot of turbulence in the marketplace. While everyone has been running away from the precious metals sector, as miners can barely remain profitable with such low metals prices, investors like Paulson are capitalizing on this opportunity. Gold has recently found strong support at $1,200 over the past couple years due to good reasons. The break-even cost of mining gold is somewhere around $1,300, therefore for miners to continue operations, the price must rise. What are your thoughts about John Paulson's decision to load-up on mining shares? Could this be the correct strategy moving forward as the stock market and USD are overextended?
