Paulson backs gold miners as NovaGold buys Alaska stake
Billionaire investor John Paulson is doubling down on early-stage gold mining equities, arguing that declining faith in fiat currencies makes the sector the optimal way to capture a newly emerging precious metals bull market.
Paulson declared the early stages of a long-term gold bull market on Wednesday, recommending investors bypass physical bullion in favor of early-stage mining equities to maximize returns. The macro call coincided with a concrete corporate move, as NovaGold Resources announced it will acquire Paulson Advisers' 40% stake in the Donlin Gold project in Alaska.
The billionaire investor, who earned billions betting against the U.S. housing market before the 2008 crisis, argued that a structural shift in the global monetary system is underway. "As people lose faith in paper currencies, gold as an alternative will continue to grow," he said. He pointed to sustained, broad-based buying from central banks alongside expanding private-sector demand as evidence that "gold is becoming the most apt reserve currency in the world, replacing fiat currencies."
For market participants looking to allocate capital, Paulson emphasized that holding physical metal limits upside compared to the leveraged returns available through undeveloped mining assets. "I think the greatest way to invest is to invest in early-stage gold stocks," he stated. This preference is directly reflected in his ongoing involvement with NovaGold, where he serves as co-chairman.
The transaction in Alaska consolidates a massive, untapped resource base under a single corporate entity, creating what Paulson views as a pure proxy for rising gold prices. "NovaGold has 40 million ounces of gold indicated and measured resources and reserves at the market [capitalization] of $4.2 billion," Paulson noted. "I think the best way to play gold is through stocks like NovaGold, if not NovaGold itself."
Paulson initially pivoted to gold in 2009, anticipating that unprecedented fiscal and monetary stimulus following the financial crisis would ultimately weaken the U.S. dollar. That fundamental thesis has played out over the long term. The precious metal has roughly quadrupled in price since his pivot, notably surging past the $5,000 threshold before experiencing a recent pullback.
