Billionaire investor John Paulson, renowned for his prescient bet against the U.S. housing market, now asserts that gold is poised for a significant long-term ascent. Paulson, who famously shifted his investment focus to the precious metal in 2009, believes we are currently in the "early stages of a long-term bull market for gold."
Speaking on CNBC's "The Exchange," Paulson highlighted that as confidence in traditional "paper currencies" wanes, gold's appeal as a robust alternative continues to strengthen. His previous pivot to gold followed the 2008 financial crisis, driven by concerns that unprecedented fiscal and monetary stimuli would ultimately devalue the U.S. dollar. Since then, gold prices have seen a dramatic rise, quadrupling to previously unseen thresholds before minor pullbacks.
Paulson emphasized the broadening demand for bullion, noting significant additions to reserves by central banks globally, coupled with escalating private-sector interest. He firmly stated, "Gold is becoming the most apt reserve currency in the world, replacing fiat currencies."
For investors seeking to capitalize on this trend, Paulson suggested that owning gold miners, particularly those with substantial undeveloped reserves, could offer greater benefits than holding physical bullion. He advocated for "early-stage gold stocks," explaining that they provide leveraged exposure to increasing gold prices.
His comments coincided with an announcement that NovaGold Resources would acquire Paulson Advisers' 40% stake in Alaska's Donlin Gold project. As co-chairman of NovaGold, Paulson highlighted the company's attractive proposition, citing its "40 million ounces of gold indicated and measured resources and reserves at the market [capitalization] of $4.2 billion." He concluded by asserting, "I think the best way to play gold is through stocks like NovaGold, if not NovaGold itself."
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