Investors Increasingly Going for Gold

22 February 2012 (PLANSPONSOREurope.com) - A bleak economic picture across Europe has helped push demand for gold, according to Angelos Damaskos, CEO, Sector Investment Managers and Fund Advisor, Junior Gold Fund.

Data from the World Gold Council reveals gold supply and demand for 2011: in value terms, demand was a record $205.5bn, 29% above the 2010 value as the gold price continued its 11-year uptrend. 

Damaskos says: “Gold’s appreciation is supported by the bleak economic picture. Europe remains the worst-affected region in the developed world, with increasing social unrest and fears of instability as a result of the sovereign and bank debt problems.  Tough austerity measures could cause a further rise in unemployment and stifle economic growth while printing of money to finance bailout programmes could cause a rise in inflation and the devaluation of key reserve currencies.  In the face of these problems, it is not surprising that gold has resumed its uptrend in the year to date.

“We believe that small cap gold mining shares offer particularly good value in this environment and are likely to outperform their larger peers. Our focus is on companies with the potential for strong growth in production. Companies we favour include Focus Minerals, an Australian miner, which recently acquired Crescent Gold. The combined entity is set to produce 180,000 ounces of gold next year, a very attractive level for a company of this size (market capitalisation stands at AUD 220 million). The company is debt free and unhedged, therefore ideally placed to grow its profitability as the gold price continues its long-term uptrend.”
 

PLANSPONSOREurope Staff
editors@plansponsoreurope.com