I argued the bull case for gold in my posts over the past few months (see “Gold bullion - regaining its shine?“, “Gold bullion glitters bright” and “Gold bullion - challenging $1,000“. With the gold price scaling fresh peaks and closing in on $1,100, it would certainly seem as if renewed interest in the yellow metal is being stirred up, especially subsequent to the purchase by India’s central bank of 200 metric tons of gold from the International Monetary Fund.

As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history - and the US greenback is heading South - the longer-term fundamental case for the yellow metal is arguably positive.

“The gold bug has caught several big hedge fund managers this year including John Paulson of Paulson & Company, Kyle

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By Saijel Kishan and Thomas Biesheuvel

March 17 (Bloomberg) — Paulson & Co., the New York-based investment firm run by John Paulson, bought a stake in AngloGold Ashanti Ltd. from Anglo American Plc for $1.28 billion as hedge funds increase their gold holdings.

Paulson paid $32 a share for the 11.3 percent stake in the Johannesburg-based gold miner, Anglo American said today in a statement. The purchase makes Paulson the company’s second- largest shareholder, according to data compiled by Bloomberg.

“We believe AngloGold Ashanti is one of the best managed and undervalued of the major global gold-mining companies,” Paulson said in an e-mailed statement. “We look forward to the implementation of their global expansion strategy.”

Hedge funds are turning to gold to mitigate potential inflation

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Investment QuotesInvestment Quotes from Hedge FundsHere is a collection of quotes from hedge fund managers on the market:“I cannot find words to describe our disappointment, embarrassment and shock over the above results,” Ainslie wrote.Congratulations to Maverick Capital for having the cojones to say this.“Be careful buying ANYTHING today,” Kyle Bass, managing partner of Hayman Advisors, warned in an Oct. 17 letter to investors.“There will be a time to buy stocks,” he added. “That time is a few years into the future when the strong have separated themselves from the week … a time when unemployment has hit 10% and U.S. GDP has dropped 4-5% (maybe more).”Congrats Kyle. Not pressuring your clients into buying regardless of the season shows some back bone..“The financial market collapse and bailout makes us sick,” he wrote. ...