Cyprus highlights the value of gold, says Junior Gold fund’s Damaskos
Angelos Damaskos, CEO of Sector Investment Managers and fund advisor, Junior Gold fund, says the value of gold is highlighted by events in Cyprus.
The decision by Cyprus to impose a charge on all bank deposits is a fresh reminder of the huge risks in the eurozone periphery. It could undermine confidence in the banking system and cause further instability that will be difficult to contain.
Importantly, it highlights the value of gold as a store of value immune from currency devaluation and a hedge against economic instability. This action, which was encouraged by the Troika as part of a bailout programme for Cyprus, could be the trigger for a change in sentiment among investors that will propel the gold price to fresh highs. It could also demonstrate the cheap market value of gold mining shares and start their significant re-rating.