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Why Michael Burry is Ditching Tech for Gold Amid Economic Uncertainty

theguru Views  

[The Guru=Hong Sung-hwan Reporter] Michael Burry, the motive of the movie The Big Short, which predicted the 2008 global financial crisis, has placed his bets on gold. The expectation of an interest rate reduction has increased investment demand for gold, driving up its value.

According to the U.S. Securities and Exchange Commission (SEC) on the 16th, Scion Asset Management, led by Michael Burry, newly purchased 447,290 shares of Sprott Physical Gold Trust (PHYS) in the first quarter (January-March) of this year. As of the 15th, the price of this exchange-traded fund (ETF) is $18.50, making the stake value approximately $8.2 million.

The value of gold is being maintained at a high level due to expectations of an interest rate reduction by the Federal Reserve (Fed). As of the 15th, the price of gold futures on the New York Commodity Exchange (COMEX) is $2391.80, an increase of 15.36% since the beginning of this year. A fall in interest rates usually lowers the dollar yield, which is considered a safe asset, leading to increased demand for gold as an alternative. Furthermore, gold is also considered a traditional hedge against inflation.

Scion Asset also expanded its investment in big Chinese tech companies during the first quarter. It purchased 160,000 shares of JD.com, 50,000 shares of Alibaba, and 40,000 shares of Baidu. On the other hand, it completely sold off its shares in American tech giants Alphabet and Amazon.com, Inc.

theguru
content@viewusglobal.com

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