Soros and Paulson increase their positions in gold

I’m starting to feel like a broken record here… overnight news was sparse and the precious metals are yet again trading quietly in tight ranges as volumes on the exchange remain depressed.  In comparison to July 2011, the average daily volumes on the Comex exchange for gold and silver in the month of July 2012 are down 17% and 42%, respectively.   Summers are generally bleaker trading periods for the precious metals, but this summer seems to be especially so.   In a report released today, the World Gold Council cited that gold demand dropped by 7.1% in the second quarter of 2012 (compared to Q2 2011).  Jewelry demand fell by 15% while investment demand tapered off by a more staggering 23%.  Due to the new gold duty in India that was imposed earlier this year, gold imports fell by 56% in the same time period of Q2.

Shedding a little more positive light on gold, it was reported yesterday that two big names in the investment world increased their exposure to the yellow metal.  Soros’ fund doubled its investment in the SPDR gold ETF to 884,000 shares (a share in the ETF equals .1 toz gold).  Paulson increased his holdings in the ETF by 25% to 21.8 million shares as well.  Hopefully the fact that “smart money” is buying gold bodes well for it as summer winds down and we head into the typically bullish month of September.  For now, the ceiling still remains strongly entrenched at $1,628 – $1,630 while bids over the last two weeks have materialized in the $1,585 – $1,590 range.