Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Angelos Damaskos: Gold is not set for 'huge' correction

Angelos Damaskos, manager of the Junior Mining and Junior Oil funds, says that despite its recent 5% slide gold is not set for a 'huge' correction.

With or without the Federal Reserve rolling out another phase of quantitative easing (QE), low levels of global growth will continue to prop up the precious metal's value, keeping its price high and helping to trigger a re-rating in the equities of gold miners.

'Whether there will be another round of QE is a difficult question to answer, if there is more liquidity there will be more inflation and that is not good for the economy.  The possibility of QE as a negative factor for gold is relatively small, though.  Given the massive debts of some countries, the possibility of printing more money, which has a devaluing effect on currencies like the US dollar, euro and sterling, means investors will look for an alternative.  Gold is an alternative store of value,' said Damaskos, who over three years has outperformed the Junior Mining fund's FTSE World/Mining benchmark by 34.02% versus 19.13%.

Gold's bull run will continue

Following a strong run over much of the summer - which has seen gold streak past $1,900 an ounce to set a new all-time record - gold has in recent days started to shed its value, dropping by more than 5% on Wednesday, and by a further 1% today, taking its price to around the $1,700 mark. 

Damaskos believes that this downward shift is not the start of a new trend, however.  'I doubt there is going to be a huge correction in the gold price.  The high price is supported,' the manager said, adding that while slow growth will likely hit demand for metals like copper, a bleak macro outlook and continued debt worries have historically pushed the price of the precious metal up.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Angelos Damaskos
Angelos Damaskos
3/16 in Equity - Gold & Precious Metals (Performance over 3 years) Average Total Return: 32.35%
Your Business: Cover Star Club

Profile: why GWM believes in life after Lloyds

Profile: why GWM believes in life after Lloyds

Lloyds Private Banking duo Chris Payne and Tom Milson left the company two years ago after deciding to act on their belief that ‘we could do it better’

Wealth Manager on Twitter