This summer, John Moran picked up 100 ounces of gold from a locker run by the Comex exchange in New York.
The bars, which were light enough to carry in a backpack, marked the culmination of a $95,000 experiment by Passport Capital, a San Francisco-based hedge fund where Moran is director of business operations and strategy.
Passport, headed by John Burbank, wanted to find out how easy it would be to buy physical gold, rather than futures contracts or gold exchange-traded funds. The firm was also interested in testing conspiracy theories about the availability of the precious metal.
Moran used his own money because Passport didn’t want to run the test with its investors’ cash. Everything went smoothly. In July, Moran bought a futures contract on 100 ounces of gold at roughly $950 per ounce for delivery in August. When the contract expired, Comex sent him a notice saying the gold was available for collection in New York at a specific time and date.
With gold prices down from a recent record, Passport is poised to repeat the process on a bigger scale for investors in its $1.2 billion Global Strategy hedge fund.
