“Wall Street Air God” Paulson: The long-term gold bull market has just begun; gold mining stocks are the real code for huge profits

The Zhitong Finance App learned that John Paulson (John Paulson), a billionaire hedge fund manager who became famous due to shorting the US subprime mortgage crisis and then accurately bullish on gold, recently said that gold is currently in the early stages of a long-term bull market.

In an interview, Paulson stated, “I really think we are at the beginning or early stages of a long-term gold bull market. As people lose confidence in banknotes, gold will continue to grow in value as an alternative asset.” He further explained that gold is becoming the most important reserve currency in the world, gradually replacing fiat money, and the global central bank and private sector demand for physical gold continues to expand.

Looking back on Paulson's investment history, he created one of the most profitable deals in Wall Street history by betting on the collapse of the subprime mortgage market, and is known as the “Wall Street Air God”. He then turned his attention to gold in 2009. At the time, he believed that fiscal and monetary stimulus policies on an unprecedented scale after the financial crisis would eventually weaken the US dollar. Facts have proven his judgment. Since then, international gold prices have surged about three times. During this period, they once hit a historic high of 5,000 US dollars per ounce, then fell back.

In terms of investment strategy, Paulson believes that compared to holding physical gold, investors will receive more generous returns from gold mining stocks, especially large companies with large untapped reserves. “I think the best way to invest is to invest in early gold stocks.” he emphasized.

When Paulson made these remarks, NovaGold Resources (NG.US), where he is the co-chairman, announced that it will acquire 40% of the shares in the Alaska Donlin Gold project held by Paulson Advisers (Paulson Advisers). Paulson used this promotion to say that with its huge resource base, NovaGold provides investors with leveraged exposure to rising gold prices. He listed the data, saying, “NovaGold has 40 million ounces of gold indicative and measured resources and reserves, and currently its market value is only 4.2 billion US dollars. I think the best way to invest in gold is through stocks like NovaGold.”

Judging from recent market performance, gold futures have attracted new buying interest after continuous consolidation. At the same time, the geopolitical situation in the Middle East is also affecting market sentiment. However, analysts still disagree on the room for gold prices to rise.

FXTM senior research analyst Lukman Otunuga (Lukman Otunuga) said that although the weakening dollar and buying on dips have injected fresh impetus into gold bulls, potential bearish fundamentals may limit the increase, especially considering the pressure brought about by rising oil prices.

As the risk of supply disruptions in the Middle East pushes up oil prices, market expectations that interest rates will remain high for a longer period of time heat up, which usually weakens the appeal of gold as an interest-free asset.

Analysts at ING pointed out in the report that this week's rebound “was more driven by fresh buying interest after the consolidation period, rather than a substantial shift in the geopolitical or macroeconomic context.” The report added that although tension in the Middle East still supports precious metals, the market is balancing weak US economic data with the risk of inflation brought about by rising energy costs.