Good Morning,

Further testing of higher values unfolded during the overnight hours in gold, as the greenback slipped nearly one full point on the index. We have now tallied a near-5% loss in the dollar during the month. At the same time, crude oil advanced by the biggest monthly gain in ten years' time. For gold to have sat still in the wake of such a powerful and

classic' combination would not have been very logical. The metal has advanced more than 8% over the past 30 days.Whether or not the dollar's decline is green shoots-based, will certainly come into question after this morning's GDP numbers.

New York spot prices opened the last session of May with a near1.5% gain,quoted at $972.70 per ounce, against the79.57 level in the dollar and with oil up another $1.14 (on the same type of invisible fundamentals as gold's) to $66.22 per barrel. Silver, no longer playing catch-up but leading the charge, rose 31 cents to $15.46. The stunner thismorning, platinumand palladium. The former gained $32 and the latter $9, to rise to $1171 and $234 per ounce respectively. One business day before GM goes bye-bye. Makes all the sense in the world.

The US dollar broke the 80 mark on the index once again overnight, and sent additional holders in search of...greener pastures. The currency lost more of its previous safe-haven appeal and headed for its biggest year-to-date monthly decline in the wake of something else that being perceived asturning greener by the day: the shoots of the economies of the world. Okay, take the Philippines off that list, as its GDP shrank by more than 2% as seen in the last set of metrics.

India, however, surprised, with 5.8% gain versus one year ago. Japan surprised even more. Its industrial production took a leap forward at a rate not seen in 56 years (!). At any rate, dollar holders appear to be demanding higher interest rates for the privilege of holding it. Since they have not yet seen signs that they are about to receive such compensation in the very near future, the results we observe: oil and gold turning in a shiny month of May performance.

This advance (some say the breakout) represents gold's first monthly gain in three. Question now is, gain to what level, why now and not during the full brunt of the 'perfect storm' and how viable the recent gains are, being inflation-anticipatory rather than actual, here and now,inflation-avoiding ones. Also in question, is the absence of visible additions to the gold ETF's holdings. Further questions may be raised, as well as answered next week, when GM's saga comes to a head, and when Mr. Geither heads to China. Rush Limbaugh will have a field day (week?) in describing the trip as a Chi-Com 'butt-kissing fest' by the Obama administration.

Thus far, the gold market has fought off some mildly, and some not so mildly, bearish news on the fabrication demand front, official sector front, and on-going deflationary scenario front. One needs to look no further than inflation data from Europe this morning: the figures show none. Zero. If you think that such a set of conditions presages a Zimbabwean-style 7.7 million percent daily level of inflation (231 million percent per month), go ahead and be our guest. Let's first get to 7.7 percent per annum, first. If that.

When we say it is too early to kiss deflation/contraction/slowdown goodbye, we are likely putting it very mildly. Rather than fret about 200-million percent hyper inflation, one would be well-advised to sit down and have a cup with the next set of statistics. Bullet point, after painful bullet point. Fresh off the newswires at Marketwatch and from the keyboard of Rex Nutting:

- The U.S. economy contracted violently again in the first quarter, falling at a revised 5.7% annual rate after sinking 6.3% in the fourth quarter, the Commerce Department reported Friday in its second estimate of quarterly gross domestic product.

- Business investment declined at a record rate during the quarter.

- Investments in housing fell at the fastest pace in 29 years.

- Domestic demand fell at the fastest rate in 29 years. Exports fell at the fastest pace in 38 years.

- Over the past year, before-tax profits are down 18%.

- After-tax profits are down 15%, the largest decline in 28 years.

- Final demand was extremely weak in the first quarter. U.S. residents' purchases of goods and services (regardless of country of origin) dropped 7.5% annualized, the largest decline since 1980.

- Final sales of U.S. goods and services fell at a 3.4% annual rate. Final domestic sales of U.S. goods and services fell 5.3%. Exports fell at 28.7% annual rate, the most in 28 years, as foreign markets fell into a deep recession.

- The two-quarter contraction is the worst in more than 60 years.

- In the past four quarters, the economy has fallen 2.5%, the biggest year-over-year decline since 1982.

- Business investments fell at a record 36.9% annual rate in the first quarter. Investments in structures dropped a record 42.3%, and investments in equipment and software fell at a 33.5% pace, the biggest drop since 1958. Business fixed investment subtracted 4.5 percentage points from growth.

- Investments in housing fell for the 13th consecutive quarter, dropping at a 38.7% annual rate, the largest decline since 1980. Residential investments subtracted 1.4 percentage points from growth.

Trade collapsed during the quarter. Exports fell 28.7%, the most in 38 years.

- Government spending fell at a 3.5% annual pace, the largest drop in 13 years.

- The price index for domestic purchases (prices paid by U.S. residents) fell 1% in the quarter. Consumer prices fell 1%, while core consumer prices (which exclude food and energy) rose 1.5%.

And now, for something completely different. A promotion.

Shameless - no, make that PROUD - self promo of the day: Kitco Metals Inc. announces the June 1 launch of stunningly designed, highest purity (.9999!) silver rounds and bars. The Kitco Signature Silver products range will be offered to US customers, for immediate delivery,starting on Monday. These are investment products of the highest order of value, quality, design, and packaging.

The original intent was to dispel the idea of putative shortages of silver. That, these products have proven. Now, Kitco comes to market with a powerful combination of quality, purity, brand-name recognition, and excellent value for fabricated product.First, they are sourced from extremely high purity metal (four nines, versus the customary three nines). Second, they are fabricated by sources that evidently have to difficulties a la the US Mint and its Eagles: Sunshine Mint - a household name to silver investors for many years- is the producer of the 1, 10,and 100 ounce minted units.


Kitco Selling Premium*

Kitco Buyback*

Kitco 1 oz Silver Round

Spot ask + $1.99 USD per unit

Spot bid + $0.02 USD per unit

Kitco 1 oz Silver Bar

Spot ask + $1.99 USD per unit

Spot bid + $0.02 USD per unit

Kitco 10 oz Silver Bar

Spot ask + $19.00 USD per unit

Spot bid + $0.20 USD per unit

Kitco 100 oz Cast Silver Bar

Spot ask + $160.00 USD per unit

Spot bid even

Kitco 100 oz Minted Silver Bar

Spot ask + $180.00 USD per unit

Spot bid + $2.00 USD per unit

(*subject to change) - what would one do without fine print?

Stay tuned for banner ads on Monday and marvel at the images of these silver investment products.

In the interim, keep an eye on the dollar, oil, GM, and keep an ear on Mr. Geithner.