The Bull Cases for Gold and Silver

Asian banks hold a small percentage of gold in their reserves: China and Japan roughly hold 1% of their foreign exchange reserves in gold. Here's the bull case for gold:

1. The public is beginning to distrust major world currencies.
2. America is running record trade and budget deficits.
3. Central banks have said they will diversify part of reserve out of the U.S. dollar into other currencies and gold.
4. China has also said it plans to diversify out of the U.S. dollar. If China allocated 25% in 12 months to gold it would be equal to all gold held by Central Banks. If China allocates just 5% of its dollar reserves to gold, it would be equal to one yea's total gold production.
5. South African gold production is at an 80 year low.
6. The average production time for gold and oil is seven years.
7. As the middle class in India grows, so does their demand for gold jewelry.

The Bull case for Silver

1. Silver production: 74% of silver result of other mining.
2. Silver is at its lowest value since 1364.
3. Is Digital Killing Silver? Photo silver is recycled over and over. Color film uses no silver. Silver is used for CDs and digital needs a computer requiring silver.
4. China: demand is increasing; Chinese use 1/70th of developed countries, most exports from concentrates not mining. (new highs in Yuan)
5. India: long history of silver demand, sales stay within the country, cannot export silver, bullion imports fell in 2004 (new highs in Rupee)
6. Mexico: November 30th 2004 ALL 31 governors of ALL the states that make up the Mexican Republic sent a communiqué to the Ways and Means Committee of the Mexican House of Representatives to express their unanimous approval of the monetization of silver and urged the
Committee to approve a bill which aims to achieve precisely this objective.
7. Bullish Scenario: Superconductivity, RFID chip (30M), Silver ETF, Debt problems
8. Bullion Silver supply stands at 367 Million ounces. (Comex 100 million, Berkshire Hathaway 130 million, Central Fund of Canada 26 million, 111 MOZ)
9. The silver-gold ratio favors silver.