During a CNBC interview on Wednesday, John Paulson stated that he believes gold is still in the initial phase of a long-term bull market, with considerable potential for further gains from its current levels.
The hedge fund manager, famous for profiting billions by betting against the U.S. housing market and later turning bullish on gold, argued that the metal's importance as an alternative asset will continue to rise as confidence in paper currency wanes.
"I do believe we are in the beginning or early stages of a long-term bull market in gold," Paulson said during the program. "As people lose confidence in paper currency, the role of gold as an alternative asset will continue to grow."
One of his most famous Wall Street trades was a profitable bet against subprime mortgages. In 2009, Paulson shifted his investment focus to gold, reasoning that the unprecedented fiscal and monetary stimulus following the financial crisis would ultimately weaken the U.S. dollar.
Since then, the gold price has roughly tripled, having once surpassed $5,000 per ounce before retreating. Paulson views the driving force behind this trend as sustained demand growth, encompassing both central banks, which are steadily increasing their reserves, and the private sector, which continues to add allocations.
"Gold is becoming the world's most suitable reserve currency, replacing fiat currency," he said. "Demand from institutions like central banks continues to grow, and demand from the private sector is growing as well." In his view, this dynamic is structural rather than cyclical, linked to a broad loss of confidence in fiat money rather than short-term trading flows.
Paulson's comments add another influential voice to the argument for sustained gold strength, reinforcing the market narrative already supported by ongoing central bank purchases and de-dollarization trends. His view that gold is gradually becoming a de facto reserve currency may encourage more institutions, particularly reserve managers seeking to reduce dollar concentration, to increase their allocations.
Beyond direct gold holdings, Paulson also noted that gold mining stocks could offer higher return potential, especially companies with significant undeveloped reserves. In his assessment, these assets have higher sensitivity to rising gold prices.
"I think the best way to invest is in early-stage gold stocks," he said.
Paulson made these remarks as NovaGold Resources Inc. (NG) announced it would acquire the 40% interest in Alaska's Donlin Gold project held by Paulson Advisers. Paulson, who serves as co-chairman of NovaGold, stated that with its substantial resource base, the company offers investors leveraged exposure to rising gold prices.
"NovaGold has 40 million ounces of indicated and measured resources and reserves, with a market capitalization of just $4.2 billion," Paulson said. "I believe the best way to participate is through a stock like NovaGold, even if it's not NovaGold itself."
Paulson's comments frame the recent pullback as a temporary pause within a long-term uptrend, not a reversal. Such high-profile bullish statements typically help bolster confidence among gold investors and may influence positioning in both physical gold and mining stocks.
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