Ray Dalio’s hedge fund invests $400M in gold

Ray Dalio appears to have contracted an advanced case of gold fever, as his Bridgewater Associates hedge fund invested more than $400 million in the metal during the second quarter.

According to a Reuters analysis of the Westport-based firm”™s 13F filings, Bridgewater bought 1.4 million shares in the SPDR Gold Trust, the equivalent of roughly 130,000 ounces of gold, and 4.1 million shares in the iShares Gold Trust, representing approximately 41,000 ounces of gold. Bridgewater now holds $914.3 million in the SPDR Gold Trust, up from nearly $600 million in the first quarter, and $268.4 million in iShares Gold Trust, up from $176 million.

Gold prices have spiked by 26% since the beginning of the year, breaking a record earlier this month at more than $2,000 an ounce. Yet it is prone to volatility ”“ its decline by more than $100 on Tuesday marked the greatest one-day loss in seven years.

The two trusts that received Bridgewater”™s investments are exchange-traded funds (ETFs). More gold is held around the world by ETFs than by central banks. Dalio has been a vocal proponent of investing in gold, telling CNBC in January during the World Economic Forum in Davos, Switzerland, that “cash is trash” and “a bit of gold is a diversifier” for investors.

The Bridgewater portfolio totaled $5.96 billion by the end of the second quarter, roughly $1 billion more than the previous quarter.