Bogus Government Figures, China and the Debt Debate

By: Mark O'Byrne | Tue, Jul 26, 2005
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Weekly Markets
Precious Metals - Strong Physical Demand in Asia. Historical Gold Prices
Oil - Yuan revaluation to boost demand in Asia
Commodities - Yuan revaluation to boost demand
Currencies - Chinese revalue yuan
Bonds - Interest rates heading higher
Stocks - Historical DOW/GOLD Chart
Property - House Prices/ Average Earnings

Weekly Commentary
Bogus Government Figures
The Debt Debate -
Fintan O'Toole V's Dan McLaughlin

Robert Rubin, Brendan Keenan, Cliff Taylor
David Smith, Gary Duncan, Bill Bonner, Stephen Roach, Charles MacKay, George Soros

Performance ( % Change)
  Current Level  5 Days  1 Year  5 Year 
Gold  424.40  0.9%  5.2%  52.0% 
Silver  7.05  1.6%  11.1%  41.4% 
S&P  1,233.68  0.5%  11.3%  -16.6% 
Nasdaq  2,179.74  1.1%  15.4%  -45.8% 
ISEQ  6,797.94  3.0%  26.2%  36.7% 
FTSE  5,241.80  0.2%  20.8%  -19.3% 
USD/EUR  0.8214  -0.8%  0.6%  -22.1% 
OIL (Nymex)  58.65  1.0%  41.8%  93.7% 

Peter Bernstein, the best selling author of 'Against the Gods - The Remarkable Story of Risk' and publisher of the highly regarded institutional newsletter, Economics and Portfolio Strategy is worried about world economic conditions and believes that a little hedging is in order. Bernstein says "I never thought I'd recommend a position in gold." He recommends putting some money in gold to insure against hyperinflation and deflation.

Weekly Markets

Precious metals were up for the week.

Oil was up and commodities were mixed but largely down.

Stock markets were up for the week.

Bond markets sold off with a consequent rise in yields.

Precious Metals

Gold was higher by $3.90 or some 0.9% for the week; from $420.50 to $424.40.

Gold in EUR terms was up more than 1% closing at EUR352.11; back above the psychologically important EUR350 mark.

Silver was higher by $0.09 or some 1.5% for the week; from $6.94 to $7.05

Platinum settled at $889 from $865. It was up some 2.8% for the week.

Reuters reported on continuing strong physical demand from Asia: "Premiums for gold bars rose to 30 to 50 U.S. cents an ounce to the London spot price in Hong Kong, compared with zero to 20 U.S. cents last week, helped by buying interest from mainland China, Japan and South Korea. "There's high demand, and also there's not much physical supply around," said Ellison Chu, senior manager at Standard Bank London in Hong Kong, a key bullion trading city in East Asia. Premiums for gold bars were steady between 50 to 70 U.S. cents an ounce in Singapore, which is Southeast Asia's biggest bullion trading centre."

The Economic Times of India reported on the continuing massive demand for gold bullion in India. The article was entitled It's official: Indian's simply love Gold: "India's share of global gold demand is about one and a half times that of the US, though its GDP is only 1/20th that of the US. "With its high rate of gold consumption, India accounts for 18% of the annual global gold demand, while its share of global GDP on nominal dollar GDP is only 1.6%."

As per World Gold Council (WGC) estimates, Indian households own about 15,000 tonnes of gold, accounting for about 10% of the world-wide stock. At current market values, gold accounts for 10-15% of the Indian household balance sheet. After rising by 63% in '04, India's gold consumption (excluding gold used for jewellery exports) rose by 57% in FY05. In fact, during the quarter ended March '05, gold consumption shot up 88%. Cumulatively, India now holds gold stock of about $200bn (29% of GDP), according to estimates.

The Gartman Newsletter remains bullish in gold particularly in terms of the Euro: "EUR350 had been strong resistance for several years, and when that resistance was broken, Gold/EUR rushed to 367 amidst near panic enthusiasm. Now it has corrected, back to the break-out point. Our enthusiasm for the trade is thus greater than ever."

Gold Rises in N.Y. as Greenspan Says Market `Excesses' Possible - Bloomberg
China Should Become the Largest Consumer of Gold in the World - Red Nova
Precious metals firm in Asia after yuan move - Reuters
More Mayhem for London Marks Gains for Gold - Resource Investor
Russian gold production down - Business News India
Glistening gold prices tipped for gains into 2006 - Reuters
Expected New SEC Boss is Long Gold - Resource Investor
Gold Rush 21 Is Sold Out: Gata Hits Pay Dirt - Business Wire
China - World's 4th Consumer of Gold - Australasian Investment Review
The future's bright, the future's silver - The Independent
Trading Gold Volatility - Hamilton, Safe Haven
The Gold/Silver Ratio & the Case for Silver - Sanders, Gold Eagle
Grandich on gold, silver, platinum, palladium, base metals and oil - Resource Investor
Gartman says Gold in Euro is back in vogue - Australasian Investment Review
GOLDEN moment - China Daily

In order to read the complete newsletter please click here or for previous editions of the newsletter click here.

Gold Investments were featured in the July/August edition of The Investor Magazine in an article entitled 'A Golden Opportunity'.

We were also featured in the July Edition of the 'Irish Broker', the official journal of the Irish Brokers Association, in an article entitled 'The Case for having an allocation to Gold Bullion in an Investment Portfolio.'


Mark O'Byrne

Author: Mark O'Byrne

Mark O'Byrne

Brief Profile
Mark O'Byrne is Executive Director of Gold and Silver Investments Limited ( He is regularly quoted and writes in the international financial media and was awarded Ireland's prestigious Money Mate and Investor Magazine Financial Analyst of 2006. He is a financial analyst who believes that due to the current macroeconomic and geopolitical situation, saving and investing a small portion of one's wealth in precious metals is both prudent and wise. Gold and Silver Investments Limited believe that hard tangible assets and monetary assets such as gold and silver, the world's oldest forms of money, will once again become the safe haven assets of choice in the coming years. The increasing economic and geopolitical uncertainties at the dawn of the 21st Century mean that gold, silver and platinum will become increasingly important in the new century as a means of preserving financial wealth.

Gold & Silver Investments Limited is a precious metals brokerage company which sells and buys a wide variety of gold, silver and platinum numismatic and bullion products to all class of investor, companies and institutions in Ireland, the UK and internationally taking payment in all major currencies. We assist our clientele in diversifying their assets with a comprehensive range of precious metal coin and bar products and by allocated and unallocated precious metal storage facilities licensed by the Chicago Board of Trade (CBOT), Comex and Nymex and by other precious metal storage programs.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important weekly financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth. We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles precious metal savings and investments. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

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