John Paulson: Gold is entering the initial phase of a long-term bull trend
Legendary investor John Paulson, who gained fame for betting against the U.S. mortgage market ahead of the 2008 crisis, stated that gold is only in the early stages of a long-term bull cycle. In his view, declining trust in fiat currencies will continue to drive investors toward purchases of the precious metal.
Central banks and private investors drive demand
Paulson is confident that the current trend is far from exhausted. Demand for gold is being driven not only by central banks, which have been increasing reserves for several years, but also by private investors actively joining the process. A recent industry survey showed that most central banks plan to continue increasing their holdings, despite purchasing 41 tons of the precious metal in one of the weaker months this year.
Price and outlook
On Wednesday night, the spot price of gold was near $4,121 per ounce. This is notably higher than the June low below $4,000, but still far from the all-time record of $5,600 set in late January.
"When people lose confidence in paper currencies, demand for gold as an alternative will continue to grow," Paulson noted.
NovaGold and Paulson's strategy
Paulson made his statements against the backdrop of news that his company NovaGold Resources is buying back a 40% stake in the Donlin Gold project in Alaska from his own fund. As a result of the deal, NovaGold will gain full control of the project. A new company with U.S. registration will be created based on the assets, with an estimated value of around $4.2 billion. NovaGold shareholders will receive approximately 65%, with the remaining 35% going to Paulson.
According to the businessman, he prefers the early stages of working with gold mining companies over investing in gold itself. As an argument, he cites an estimate: NovaGold has 40 million ounces of gold reserves, which, at its current market capitalization, indicates significant growth potential.
Expert perspective
Paulson's strategy is a bet on real assets and control over resources, rather than speculative instruments. This is a signal to the market: institutional players see gold not just as a safe-haven asset, but as a long-term tool for capital preservation. If central banks continue to increase reserves and demand from private investors strengthens, we could see new all-time highs in the coming quarters.