Wall Street Legendary Investor Paulson: Gold’s Long-Term Bull Market Is Still in Its Early Stages

In an interview with CNBC's "The Exchange" on Wednesday, John Paulson stated that he believes gold is still in the early stages of a long-term bull market, and that there remains considerable upside potential in the current rally.

This hedge fund manager—who earned billions by shorting the U.S. housing market and later turned bullish on gold—said the importance of gold as an alternative asset will continue to rise as confidence in fiat currencies declines.

Paulson said on the show: “I really do believe that we are in the early or initial stages of a long-term bull market for gold. As people lose confidence in fiat currency, gold’s status as an alternative asset will continue to strengthen.”

One of Paulson’s most renowned trades on Wall Street was betting on subprime mortgages. In 2009, Paulson shifted his investment focus to gold, arguing that the unprecedented fiscal and monetary stimulus following the financial crisis would ultimately weaken the dollar.

Since then, the price of gold has roughly tripled, at one point surpassing $5,000 per ounce before retreating. Paulson believes the driving forces behind this trend come from steadily expanding demand, including growing reserves by central banks as well as increasing allocations from the private sector.

He said: “Gold is becoming the world’s most suitable reserve currency, replacing fiat currencies. Institutional demand from entities like central banks continues to grow, and so does demand from the private sector.” In his view, this trend is structural rather than cyclical, primarily related to widespread loss of confidence in fiat currencies, not just short-term trading flows.

Paulson’s remarks add another strong voice to the bullish thesis for gold, further reinforcing a market narrative already supported by sustained central bank gold purchases and the trend of de-dollarization. His assertion that gold is becoming the de facto reserve currency could encourage more institutions to increase their allocations, especially those reserve managers seeking to reduce dollar concentration.

In addition to directly holding gold, Paulson also stated that gold mining stocks may offer even greater return potential, particularly those companies with large undeveloped reserves. In his view, these assets are more sensitive to rising gold prices.

He stated: “I think the best way to invest is to invest in early-stage gold stocks.”

Paulson shared these views as NovaGold Resources (NG) announced it will acquire Paulson Advisers’ 40% interest in the Donlin Gold project in Alaska. As co-chairman of NovaGold, Paulson said that with its massive resource base, the company could offer investors a more leveraged exposure to gold price appreciation.

Paulson said, “NovaGold has 40 million ounces of indicated and measured resources and reserves, yet a market cap of only $4.2 billion. I believe the best way to participate in gold investing is through stocks like NovaGold, even if not holding NovaGold itself directly.”

Paulson’s comments frame the recent price pullback as a temporary pause in a long-term uptrend rather than a trend reversal. Such high-profile bullish statements often boost confidence among gold investors and may influence positioning in the gold spot market and mining stocks.