David Einhorn’s hedge fund, Greenlight Capital, delivered a strong performance last quarter by making significant bets on gold. The fund’s success comes amid a soaring rally in the precious metal, which Einhorn believes still has room to grow—though with some caution.
Speaking at the Sohn Investment Conference in New York, the billionaire investor told CNBC that while he expects gold to continue rising after its record-breaking gains in 2025, he remains wary of extreme price spikes.
“I’d be really happy if it went to $3,500 or $3,800; I’d be really unhappy if it went to $30,000 or $50,000,” Einhorn said.
Gold prices briefly hit $3,500 per ounce in April, largely driven by concerns over tariff-related inflation. Historically viewed as a premier hedge against inflation, the metal has surged roughly 22% so far this year. However, despite prices retreating to a one-month low amid softer inflation data, Einhorn believes other factors will sustain the rally.
“Gold is not about inflation. Gold is about the confidence in the fiscal policy and the monetary policy,” he explained, pointing to what he sees as aggressive government spending and monetary easing—factors fueling a widening federal budget deficit largely ignored by policymakers.
Einhorn highlighted the shortfall in efforts to reduce the $1.9 trillion federal budget deficit, referencing the Department of Government Efficiency, which had initially pledged to cut $2 trillion in spending.
“A few months have gone by — it’s like $150 billion, maybe,” Einhorn said. “That’s enough to cover next year’s defense funding increase; that’s going to get eaten up really, really fast.”
He also noted that tariffs, once touted as a major source of government revenue, now seem poised to generate about $100 billion, falling short of expectations.
Fiscal challenges are expected to intensify with anticipated extensions of the 2017 tax cuts under the Trump administration. A recent congressional bill is projected to add trillions to the deficit over the next decade.
“We’re not really concerned about the deficit. There’s a bipartisan agreement to do nothing about the deficit until we actually get to the crisis,” Einhorn summarized.
If these fiscal pressures continue to push gold prices higher, Greenlight Capital stands to benefit further. The hedge fund outperformed the S&P 500 with an 8.2% gain in the first quarter, attributing gold’s 19% surge as its “biggest winner.”
However, some analysts remain skeptical about gold’s sustained momentum. ING forecasts gold to average $3,128 per ounce through 2025, citing a slowdown in some of the metal’s supporting factors.
