Investor George Soros has moved to protect his investments against what he believes will be a deterioration in the US economy, and his gamble seems to have paid off so far.
The 85-year-old billionaire purchased 19 million shares in gold mining firm Barrick Corporation in the first quarter, according to Investopedia.
In addition, Soros’ fund bought 1.05 million shares in SPDR Gold, a fund which tracks the price of gold.
The price of gold reached a three-week peak July 8 and has increased by 20 percent so far this year. This means that Soros’ investments have paid off. He has secured returns from the Barrick investment of 170 percent.
Gold is traditionally seen as a safe haven by investors in times when the economic outlook is less than promising.
Soros’ view of the prospects for the US economy is bleak. His fund has drawn down its US stock holdings by 37 percent amid concern that economic and political turmoil in China will negatively impact economic activity.
Soros also sees mounting political dangers, chief among them Britain’s June 23 vote to leave the European Union. He compared the potential fallout from the decision to the 2007-08 financial crisis, the Independent reported.
Days after the Brexit vote, Soros warned that the British economy would suffer badly and that the EU could disintegrate unless action was taken.
“Financial markets worldwide are likely to remain in turmoil as the long, complicated process of political and economic divorce from the EU is negotiated, ” wrote Soros, according to the Independent.
However, Soros has not given up on the EU. He argued that if populations in other countries see the negative effect Britain experiences by leaving, the EU could be revived.
“If disaffected voters in France, Germany, Sweden, Italy, Poland and everywhere else see the EU benefitting their lives, the EU will emerge stronger, ” he wrote, according to Business Insider.