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John Burbank Still Bullish on Gold

May 09, 2011 | About:

Last week, a WSJ article caused quite a stir when it was revealed that hedge fund gurus like George Soros and John Burbank were selling gold and silver.

"George Soros's big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years.

Mr. Burbank, a longtime gold supporter who predicts growing worries about the creditworthiness of the U.S. and some other nations, has trimmed some of his investments to lock in profits, according to someone close to the firm. This person added that Mr. Burbank remains a long-term gold bull and expects to buy more gold-mining shares after a decline."

However, John Burbank was interviewed by Bloomberg this morning and it was obvious that the hedge fund manager is not bearish about gold.

Burbank mentioned that there are two different vantage points, the short term which is the next few months and the long term.

Burbank said that hedge funds have to trade around the short term and that is why he trimmed his gold positions.

Over the next few months, gold and commodity related investments may suffer as traders fret about the end of QE2.

However, in the long term, fiscal and monetary irresponsibility in Europe and the United States will mean that central banks around the world will be forced to accumulated physical gold.

Burbank is still long-term bullish on gold. His firm even employs two geologists in Vancouver who have been hired to uncover junior gold-mining companies.

In addition, Burbank still believes in the resource scarcity theme and believes that oil prices will head higher over the long term.

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