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Funds rushed back into gold as prices surged in Q1 - 13F filings

By Devika Krishna Kumar and Marcy Nicholson

May 16 (Reuters) - Billionaire financier George Soros and other big investors have returned to gold for the first time in years, U.S. Securities and Exchange Commission filings showed on Monday, a move which spurred a rally to 12 month highs.

Institutional and retail buying has propelled prices to fresh one-year highs of $1,303 an ounce this month.

In the first quarter, Soros, who once called gold "the ultimate bubble," returned to gold after three years, with 1.05 million shares in SPDR Gold Trust, the world's biggest gold exchanged-traded fund (ETF), valued at about $123.5 million.

Soros Fund Management LLC had sold its stake of almost 531,000 shares worth $82 million in the fund in the first quarter of 2013.

Others have followed Soros back into gold, although on a smaller scale, including Jana Partners, led by activist investor Barry Rosenstein, which bought 50,000 shares, worth about $5.9 million

Monday's 13F filings come after CI Investments Inc , an investment manager of Toronto-based CI Financial Corp, almost quadrupled its stake in the ETF, becoming the sixth-largest shareholder, a May 6 filing showed.

"We believe this is the start of a change in trend as momentum following funds are likely to start buying gold due to the 20 percent price gain and improved technical position," said Mark O'Byrne, research director of bullion dealer GoldCore in Dublin.

The buying by some of the largest gold investors has come as expectations that the U.S. Federal Reserve would continue to raise interest rates this year has faded.

Gold fell out of favor with investors in 2013 when the Fed indicated it would start raising interest rates for the first time in a decade.

In December last year the Fed raised rates for the first time since 2006 and the price of spot gold fell to the lowest level in nearly six years at $1,045.85 per ounce.


In the first quarter this year though, spot gold prices rallied 16 percent for their best quarterly performance in nearly three decades and hit their highest level in a year.

Funds have also increased exposure to gold company stocks. The Soros fund returned to invest in Barrick Gold Corp after unwinding its stake in the company in the third quarter of last year.

It bought nearly 19.4 million shares in Barrick Gold at a value of $263.7 million, the filing showed. CI Investments bought 1.5 million shares in Barrick Gold and 2.9 million shares in GoldCorp Inc.

(Reporting by Devika Krishna Kumar and Marcy Nicholson in New York; Editing by Clive McKeef)