The 11 percent drop in gold prices during September has intensified the troubles for star investor John Paulson’s hedge funds.

Paulson & Co.’s biggest funds have sagged all year, but until last month, his other funds were able to weather the storm thanks to their bullish bet on gold. Now the precious metal’s slide has helped depress the other funds too, The Wall Street Journal reports.

Paulson’s gold fund dropped 16.4 percent in September, exceeding the decline of gold itself. For the first nine months of the year, the fund is up just 1 percent, compared to a 16 percent rise by gold bullion.

The discrepancy probably results from the fund’s holdings of gold mining stocks, which have fared worse than the precious metal itself.

Paulson's largest funds are its two Advantage offerings. Investors can get them priced in gold to hedge against the dollar’s weakness and take advantage of gold’s strength.

The gold-denominated shares ended the first nine months of the year down 20 percent, after standing in positive territory for most of 2011.

Paulson might be pleased to know that he’s not alone in his weak performance recently, though some of his losses exceed industry averages.

Hedge Fund Research reports that hedge funds on average posted a dip of 2.8 percent in September. That put the loss at 5.5 percent for the third quarter, the fourth worst quarterly performance since the data began in 1990.