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Ray Dalio Increased His Exposure To Gold In Q1 2019

Kitco News

(Kitco News) - Gold continues to shine for billionaire investor Ray Dalio, who increased his fund’s holdings of the yellow metal during the first quarter of 2019.

The latest SEC filings show that Dalio’s fund Bridgewater Associates bought 118,973 shares of SPDR Gold Shares (NYSE: GLD) in the first three months of the year, bringing his total position to 4.027 million shares, valued at more than $491 million.

At the same time, the hedge fund also increased its holdings in iShares Gold Trust (NYSE: IAU) to 11.6 million, up from 11.3 million reported in the fourth quarter of 2018. The firm’s positon in IAU is valued at $142.7 million.

While the firm sees growing potential for bullion, it reduced its exposure in gold mining companies. The filings show that Bridgewater sold some of its shares in Agnico Eagle, B2Gold, Wheaton Precious Metals and Yamana Gold. The company also sold all of its shares of Eldorado Gold.

Dalio has been a firm believer in gold as a safe-haven asset since 2017.

“If you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this. Don’t let traditional biases, rather than an excellent analysis, stand in the way of you doing this,” he said in a LinkedIn post in August 2017.

Bridgewater’s growing exposure to gold comes as Dalio said that he is less worried about the U.S. falling into a recession before the next presidential election.

“While I still expect that there will be a significant slowing of growth in the US and most other countries, I have lowered my odds of a US recession coming prior to the US presidential election to about 35%,” he said in a LinkedIn post in February.

“While the Fed probably doesn’t have enough firepower to offset a deep recession, the big sag that we expect is probably manageable. More specifically, the Fed now has 250bps of easing (which will be more impactful than typical because of the longer durations of assets this cycle), plus the ability to turn QE back on, which we estimate is roughly equivalent to the 4% to 5% of easing typically required to get out of recessions,” he wrote.

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