George Soros’s hedge fund unloaded most of its gold holdings during the first quarter. At the end of March the New-York based Soros Fund Management possessed 49,400 shares of the SPDR Gold Trust against 4.7 million shares held at the end of December. A 5 million share stake in the iShares Gold Trust at the end of December disappeared completely from the latest filing.

At the end of Q4 the firm’s gold ETF positions were valued at over $774 million. Now, at the end of Q1 the remaining gold position was worth less than $7 million.

The sales make sense given that Soros said he had bought gold because he was worried about deflation, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh.

"It's pretty hard to make the case for deflation right now so if that was a reason you were buying gold, you should take this signal from Soros," he said.

Inflation is now the greater concern, Luschini said. So most investors should still keep about 3 percent to 5 percent of their assets in gold to protect against inflation and possible further problems in the world financial system.

Soros also reduced stakes in gold and silver mining companies during the first quarter. The firm owned 1.4 million shares of Kinross Gold at the end of the quarter, down from 4 million shares three months earlier. Holdings in Novagold Resources dropped to 3.5 million shares from 12.9 million.