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>Debt Ceiling Threatens to Add Insult to Fiscal Cliff Injuryby Peter A. Grant
Nov 01, AM 
Gold edged modestly higher in overseas trading, setting a new high for the week at 1727.03. While these gains improved the short-term technical picture, they proved unsustainable, and the yellow metal has retreated into the range.As suggested in yesterday's comment, the market is unlikely to take gold decisively one direction or another ahead of tomorrow's October jobs data (barring any major surprises) and next week's election. Investors as usual will be well served by tuning out the noise and remaining focused on the underlying reasons that they own gold n the first place. I would wager that who sits in the Oval Office doesn't even register for most. Whomever is sworn in as President in January is going to face all the same problems that we are currently facing: A sluggish economy, chronically high unemployment and an absolute mountain of debt. And despite what seems to be the conventional wisdom, the President has little control over such matters. The power to change the trajectory in these critical areas really lies with Congress. As if the impending 'fiscal cliff' wasn't troubling enough, it has now become evident that the United States will butt up against it's $16.4 trillion debt ceiling at the end of the year as well. If you recall the partisan mayhem of the last debt ceiling debate, the added turmoil provided by the automatic sequestration spending cuts and the expiration of the extended Bush-era tax cuts threatens to weigh heavily on our already vulnerable economy as 2013 commences. Treasury has said it is prepared to employ "extraordinary measures" to prevent a default, saying "We continue to expect that these extraordinary measures would provide sufficient 'headroom' under the debt limit to allow the government to continue to meet its obligations until early in 2013." However, the fact that we're even talking about a potential default again — just 15-months after the last debt ceiling crisis, that nearly shut down the Federal government and ultimately led to a downgrade of US sovereign debt — should be extraordinarily troubling to every American. These are the kinds of things that illicit action from real gold buyers, not who may or may not win an election. Because, as the sub-headline on Matthew Lynn's MarketWatch piece on Germany's gold reserves pointed out yesterday, "There’s something reassuring about physical money." Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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Thursday November 1
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