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Several prominent investors expressed their concerns about the U.S. dollar at the Ira Sohn Conference. We interviewed Marc Faber (read entire interview here). Here is part of what he said:

I think that in today’s presentations many observers have expressed a view that it’s very difficult to cut entitlements. In other words, social security, Medicare, and Medicaid because nobody wants to do that. Nobody wants to accept that because everybody lives from that, so essentially the fiscal deficit will stay very large, and it will mean that over time the US dollar will lose its purchasing power, more money will have to be printed, more quantity of easy measures will have to take place, and so forth. And eventually, the children, your children will be affected by all this.

Faber has a reputation for being too pessimistic but we think this time he is very close to reality. Several prominent hedge fund managers like Jim Rogers, Julian Robertson, and Ray Dalio agree with him about the US dollar. As a result, investors and hedge funds are flocking into gold, oil, metals and other hard assets that can retain their value in an inflationary environment. The demand from high growing emerging market countries also put a floor under these commodities.

Hedge funds follow various strategies to benefit from increase in gold prices. Hedge fund managers such as David Einhorn bought physical gold. John Paulson, Dan Loeb and Eric Mindich prefer Gold ETF (GLD). John Griffin, James Dinan like Gold Miners ETF (GDX). Other hedge fund managers invested directly in gold mining stocks.

Here are the top gold producers that hedge funds have and prominent investors invested in at the end of March:

Company

Ticker

Holdings

No. of Funds

AngloGold Ashanti Ltd

AU

2,366,391

14

Barrick Gold Corp

ABX

1,363,465

37

Gold Fields Ltd

GFI

1,233,647

14

Newmont Mining Corp

NEM

988,593

29

Goldcorp Inc

GG

701,160

19

Kinross Gold Corp

KGC

596,222

23

Allied Nevada Gold Corp

ANV

444,486

12

Agnico-Eagle Mines Ltd

AEM

443,206

17

PAN American Silver Corp

PAAS

415,919

15

Silver Wheaton Corp

SLW

375,808

16

IAMGOLD Corp

IAG

371,106

15

Silver Standard Resources Inc

SSRI

358,338

7

Harmony Gold Mining Co Ltd

HMY

343,779

7

Seabridge Gold Inc

SA

234,206

7

Randgold Resources Ltd

GOLD

233,457

11

New Gold Inc

NGD

189,773

11

Yamana Gold Inc

AUY

184,057

15

Gammon Gold Inc

GRS

170,597

11

Eldorado Gold Corp

EGO

138,274

13

Royal Gold Inc

RGLD

102,166

7

Great Basin Gold Ltd

GBG

101,167

8

Hecla Mining Co

HL

91,471

15

Minefinders Corp

MFN

71,617

8

Aurizon Mines Ltd

AZK

59,353

9

Northgate Minerals Corp

NXG

59,263

8

Cia de Minas Buenaventura SA

BVN

56,736

11

Nevsun Resources Ltd

NSU

32,585

6

Golden Star Resources Ltd

GSS

30,229

11

Gold Resource Corp

GORO

4,224

5

Tanzanian Royalty Exploration Corp

TRE

306

2

Paulson is the most bullish hedge fund manager about gold since 2009. One of his largest investments in gold is AngloGold Ashanti. He has $2 Billion invested in AU. Barrick Gold ranks second with a total of $1.4 Billion in hedge fund positions. ABX is the most popular gold miner in terms of number of hedge funds invested in. There were 37 hedge fund managers in ABX at the end of March. Paul Touradji and Eric Sprott are among these fund managers.

Gold Fields is the third miner with a $1+ Billion cumulative hedge fund ownership. Hedge funds own around 10% of the company. Paulson Eric Mindich have large positions in GFI. Newmont Mining is the second popular gold miner in terms of the number of hedge funds invested in. There were 29 hedge funds with NEM holdings. Steve Cohen and Jim Simons preferred NEM.

We believe gold miners provide a leveraged exposure to gold. These stocks should perform better than gold bullion if prices keep rising. On the other hand they perform worse than gold bullion in bear markets.

Source: List of Gold Miners That Hedge Funds Love

Additional disclosure: I am long physical gold.