John Paulson, the hedge fund manager renowned for profiting from the collapse of the U.S. housing market, has shifted his focus toward gold, asserting that the precious metal is still in the nascent phase of a sustained upward trend.
“We believe we are witnessing the beginning phases of a prolonged bull market for gold,” Paulson stated during an appearance on CNBC’s “The Exchange.” He emphasized that as confidence in paper currencies wanes, gold’s role as a viable alternative asset continues to expand.
Paulson, whose prescient short position against subprime mortgages ranks among the most lucrative trades in Wall Street history, began investing heavily in gold in 2009. At the time, he warned that aggressive fiscal and monetary stimulus measures following the financial crisis would erode the value of the U.S. dollar. Since then, gold prices have surged nearly fourfold, briefly surpassing $5,000 per ounce before experiencing a correction.
The billionaire investor noted that demand for gold is broadening across both institutional and private sectors, with central banks increasingly incorporating the metal into their reserves.
“Gold is emerging as the premier global reserve asset, gradually displacing traditional fiat currencies,” Paulson remarked. “Central bank demand remains robust, and private-sector interest continues to rise.”
In addition to advocating for physical gold, Paulson highlighted the potential advantages of investing in gold mining companies—particularly those with substantial untapped reserves.
“The most effective approach is to invest in early-stage gold equities,” he advised.
His remarks coincided with NovaGold Resources’ announcement that it would acquire Paulson Advisers’ 40% stake in the Donlin Gold project in Alaska. As co-chairman of NovaGold, Paulson emphasized the company’s strong resource base as a compelling reason for investors to consider gold-related equities.
“NovaGold holds 40 million ounces of measured and indicated gold resources and reserves, yet trades at a market capitalization of just $4.2 billion,” Paulson explained. “For investors seeking leveraged exposure to rising gold prices, opportunities like NovaGold represent an ideal entry point.”
