Renowned hedge fund manager John Paulson is committed to gold. A new government filing from Paulson & Co. shows that as of December 31st, it remains the largest holder in the SPDR Gold Trust (GLD). It owns 10.33 million shares of GLD, the biggest gold exchange-traded fund in the world. Paulson’s company has maintained this stake for a year and a half.

Gold-backed ETFs saw nearly 70 tons of gold inflows in January, the largest since September 2012. The majority of that – 49 million tons – occurred in GLD. However, speculative interest in the metal has dropped again in February, and GLD has fallen more than 8% from its January high.

Speculators think the January surge in the gold price was a short-term reaction to volatility in Europe, and many investors are now placing their bets on the supposed economic recovery of the United States. Paulson seems to be looking at things differently and sees inflation looming in America’s future.

At a time when most investors have been running from gold, Paulson maintains a long-term bullish view of the yellow metal. He is no stranger to contrarian investing. Paulson is best known for making a $12 billion profit by betting against the housing market in 2007. If his current stake in gold is any indication, he expects another big market upset in gold’s favor.

Paulson’s rationale for gold investing is simple and based on historic trends. When currencies become volatile and prices inflate, gold holds its value. He acknowledges that the Federal Reserve’s money printing hasn’t yet created dramatic inflation, but insists that it will come in time. Anyone concerned about protecting their savings far into the future, should make gold a part of their portfolio. As he said in 2013:

Historically gold has been a very good currency alternative – an excellent currency alternative in times of inflation. What’s happened I think currently is although the Fed has printed a lot of money, to date there’s been very little inflation. So people that bought gold in anticipation of inflation, some of them have lost patience, and that has caused the price to fall in the current environment. However, I would say that the rationale for owning gold has not gone away. I think the consequences of printing money over time will be inflation. It’s just difficult to predict when. We’re at risk of having very high rates of inflation because of the amount if money that’s been printed.”