Paulson & Co. is not spooked by the recent swoon in gold prices—a swoon that cost firm founder John Paulson in excess of $1 billion. But while the New York hedge fund remains confident in its huge bet on the precious metal, it warns there may be more bumps in the road.
John Reade, a partner at Paulson, told investors on a conference call yesterday that the firm would stay the course with its gold investments. Paulson's thesis is that continued quantitative easing will eventually lead to a spike in inflation that will send gold soaring.
But Reade told clients that there could be more price fluctuations in the short term, Reuters reports.
Gold suffered its worst two-day drop in 30 years earlier this month. The metal's price has since stabilized and recovered somewhat.