There's Still A Case For Holding Gold - Greenlight's Einhorn

Sarah Benali  
Tuesday April 25, 2017 15:15
(Kitco News) - Hedge fund giant David Einhorn admitted that gold was a profitable investment for Greenlight Capital in the first quarter, and will continue to be, according to his latest letter to shareholders.

“Gold rose over 8% to start the year. Nothing significant happened here (the White House columns are not gold yet); gold simply reversed a portion of the post-election decline it suffered last quarter,” he wrote Tuesday.

“Gold remains a long-term position with a thesis that global fiscal and monetary policies remain very risky.”

Despite posting gains so far this year, gold prices have fallen under pressure as investors seek riskier assets. June gold futures fell to two-week lows Tuesday, last trading at $1,265.80 an ounce.

“Our longs were profitable, though they went up a bit less than the market. Our shorts generated losses but added alpha, and gold gave us a small profit in macro,” Einhorn wrote.

The “biggest winners” for the over $1.5-billion hedge fund were Apple, Chemours and gold.

“At quarter-end, the largest disclosed long positions in the Partnerships were AerCap, Bayer, CONSOL Energy, General Motors Company and gold,” Einhorn wrote.

Greenlight Capital funds returned 1.3% in Q1 of 2017, the letter said.

Back in February, during a conference call with investors, Einhorn reiterated his positive view on gold as an inflation hedge.

“Our long-term outlook remains bullish… The new administration comes with a high degree of uncertainty, and its policy initiatives appear to be focused on stimulating growth and, with it, inflation,” he said in the call according to a report by Bloomberg.