Michael Burry (Michael Burry), the “big short” prototype that became famous during the subprime mortgage crisis, purchased about 441,000 copies of the Sprott Physical Gold Trust (Sprott Physical Gold Trust) last quarter. Almost all of the trust's assets are physical gold bars.

Bury's Scion Asset Management disclosed its first-quarter shareholding in a regulatory filing last week. At the end of March, this gold bet was worth $7.6 million and was Scion's fifth largest position, accounting for 7.4% of the company's $103 million US equity portfolio.

According to Sprott's “Gold Calculator,” if Bury's bet hasn't changed, it's worth $8.1 million as of last Friday.

Buying gold was a surprising move for Bury, an investor known for finding cheap stocks, including GameStop, which became a meme stock a few years ago. He also shorted Tesla, the “Cathie Wood” Ark Innovation ETF, and a microchip ETF with Nvidia as its main holdings.

Notably, the second “Big Short” prototype, John Paulson (John Paulson), the head of the Paulson Company, just like Bury, seems to be optimistic about gold and other precious metals.

Paulson's company filed with the US Securities and Exchange Commission (SEC) last week showed that as of the end of March, the 18 stocks held by the company included AngloGold Ashanti, Agnico Eagle Mines, Equinox Gold, Iamgold, International Tower Hill Mines, Novagold, Perpetua Resources, Seabridge Gold, and Trilogy Metals.

As early as 2021, the veteran investor predicted that stubborn inflation would force the Federal Reserve to raise interest rates, thereby spurring investors to sell cash and other assets and buy gold instead. He believes that the double blow of soaring demand and limited supply will cause the price of gold to soar.

Facts have proven that Paulson's appeal was prescient. To curb inflation, the Federal Reserve has raised the benchmark interest rate from close to zero to more than 5%, while the price of gold has jumped from around $1,800 per ounce that Paulson touted in 2021 to a record level of over $2,400 in recent weeks.

Berry also correctly predicted rising inflation and interest rates, and he seemed to agree with Paulson that gold would benefit from it.

However, it is worth pointing out that the size of the two positions may have changed when the 13F document was published. Furthermore, the data does not include short selling stocks, private investments, overseas holdings, and non-stock assets such as bonds and real estate.

Despite this, Bury's purchase of gold was relatively large and unusual, which is certainly noteworthy, especially when the two biggest winners in the real estate crash were betting heavily on gold at the same time.

Editor/Jeffrey