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Gold Underpinned on Mixed Databy Peter A. Grant
May 03, AM 
Gold retreated modestly on the heels of today's better than expected employment report, as the argument for the Fed to start removing accommodation was bolstered somewhat. However, the yellow metal came right back on weaker than expected factory orders and services ISM.Nonfarm payrolls for April came in just above expectations at +165k, although the whisper had been lower in the wake of the ADP employment survey miss earlier in the week. Upward revisions to payrolls in March and February and the downtick in the jobless rate to 7.5% were encouraging. Stocks took off to the upside and the yellow metal wobbled. However, factory orders in March were much weaker than expected at -4.0%. ISM-NMI was also a disappointment, falling to 53.1 in Apr, on expectations of 56.0. Where the jobs data was generally supportive of a move toward tighter policy, the follow-on data favored continued easy policy and gold recovered its intraday losses. If it's May, it must be time for the debt ceiling debate to bloom once again. The debt ceiling has been suspended since January, running up to $16.845 trillion. If Congress doesn't reach some deal on taxes and spending before 18-May, the debt ceiling gets reinstated at whatever the current level is. The Treasury department has already said they can work some magic to overt an immediate government shutdown, but probably not for more than a couple months. However, with the debt already in excess of $16.8 trillion and still rising, even the Treasury Borrowing Advisory Committee (TBAC) is concerned about the ability to keep rates near 0% indefinitely. ZeroHedge reported earlier in the week on some "concerning statistics" in the latest TBAC report. Most notable perhaps was the estimation that "over the next decade the USD cost of financing will explode from around $205bn (based on TBAC data) to over $855bn." A near trebling of debt servicing costs is sure to take a pretty big bite out of the economy. Keep that in mind as you contemplate your longer-term investment allocations. 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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