The Commerce Department released a rash of lousy economic reports this week, the kind that drives up the price of gold. Considering that we have positions in GLD and DGP (a leveraged ETF), the news isn’t necessarily bad.

First, retail sales dropped for the eight time in the past 10 months. Sales were 9.4% lower than in April 2008, down 10% compared with the same period a year ago.

Then, the U.S. trade gap increased in March for the first time in eight months as exports declined faster than imports. The trade deficit – the difference between exports and imports – increased by 5.5% to $27.6 billion in March from $26.1 billion in February.

Plus, that four-letter word the government hates to talk about, D-E-B-T has been rearing its ugly head in the media lately. Government public debt totals $11 trillion and counting (there’s actually A National Debt Clock in Manhattan that keeps a running tab). Debt climbs at a rate of almost $4 billion per day.

If you consider the government’s future obligations such as social security, health care and other contractual items, the total skyrockets to $71 trillion.

To pay back this debt at $1,000,000 per day would take 191,780 years! Instead of reducing the amount, the government just prints more money, making dollars worth less and less.

That’s when gold becomes alluring, valuable and very popular. While worries continue to mount about the economy, here’s what gold is up to:

The price rose $2 to $925.90 an ounce while the S&P 500 fell over 2%. In fact, it even gained in the face of the dollar’s rise. The type of demand seen in the morning sessions suggested that buyers of ETFs were catalysts for the strength.

Like we said when we first suggested adding a little gold to your portfolio, since bottoming at about $700 per ounce last October, GLD has been in a nice uptrend. I also said a break above $930 would be very bullish. At $925.90, it’s closing in fast.

We welcome your questions and comments.