The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By David Gillie
NEW YORK ( ETF Digest) -- Two major news events have caused a breakout in gold.
The first was Bernanke testifying before The House Banking and Finance Committee and giving a nod to additional stimulus (QE3).Secondly, Moody's said the Triple A rating on U.S. bonds would not be downgraded if the debt ceiling were raised and budget cuts were implemented. This will basically force Congress and the White House to raise the debt ceiling quickly and work out their squabbles and political positioning later. It also gives that the all important "blameability" that they were "forced" to raise the debt ceiling to protect America's credit. It will also put to rest the rhetoric about a halt to the payment of Social Security for seniors and pay for the military. It's interesting that the first places the government has to cut are seniors and soldiers -- throwing the golf clubs in Air Force One at $58,000 per hour and congressional junkets and perks are off the table for failure of American credit. It's good to be king. Yeah, it's crazy. The only way to protect credit on the debt that you can't pay is to borrow more money just to pay the interest on the money that you can't pay back. I think I'm going to call Visa tomorrow and tell them I don't have the money to make the minimum payment and see if they'll raise my credit limit and give me more money. Oh wait, I'm not a government. I have to be rational and responsible. Never mind. Anyway, for schmucks like us that can't borrow money on other people's account, it would almost be irresponsible not to have assets in gold as currencies are being crushed -- the U.S. dollar on endless stimulus tricks and Ponzi schemes and the euro on collapsing economies throughout the region. Upon analysis on the precious metals sector, PowerShares DB Double Long Gold (DGP) appears to be our best option in this sector. It is one of the most heavily traded of the precious metals ETFs/ETNs and leveraged for the best performance. This is a pure gold position without silver, platinum or palladium, which are substantially more volatile than gold.