John Paulson, the hedge fund manager, sold 15 per cent of his fund’s holdings in the SPDR Gold Shares exchange-traded fund in the fourth quarter, equivalent to about 9 tonnes.

His firm Paulson & Co, which was still the largest single owner of the shares as of December, held 17.3m shares, down from 20.3m shares at the end of September, according to filings made to the Securities and Exchange Commission.

The fall in his gold holdings in the fourth quarter follows a reduction in the previous three months by 34 tonnes. Mr Paulson bought almost 100 tonnes of gold in early 2009, and his portfolio and its performance is closely watched by commodities traders, as he still owns more gold than some central banks.

Gold had a volatile fourth quarter as investors exchanged the metal for dollars, falling to $1,521.94 a troy ounce, its lowest point in five months at the end of December. In a so-called dash for cash, hedge funds, which suffered losses elsewhere in their portfolios, took profits on their gold holdings.

Despite gold’s price fluctuations, a strong first half rally helped its performance for the year, and the yellow metal finished 10 per cent higher in 2011. Bullion was at 1,728.59 in midday London trading on Wednesday, up 10 per cent since the start of the year.

Despite the sales, some analysts believe that Mr Paulson’s fundamental view on gold has not changed, and that he may have found another avenue of exposure to it.

Before the filings were made, Edel Tully, precious metals strategist at UBS, wrote that while the buying and selling of prominent investors could potentially affect gold prices if the market views the move as a strategic shift in sentiment, “such interpretations are quite difficult to make as it could very well be the case that exposure to gold is merely transferred to other less visible channels”.

With commodities and gold markets seeing benefits of improved sentiment among investors, gold ETFs have also seen fund inflows. SPDR Gold Trust, the largest physical gold exchange ETF, has had inflows of 24 tonnes since the start of the year.

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