Gold and Rates

One thing for sure, when we experience problems like we did on Tuesday, the flight to quality is to bonds, pushing yields lower and this proved true Tuesday. In past down moves like this one, gold has also been a safe haven, but that has proved not to be true this time. While it rallied yesterday, it was down hard Tuesday and is down again today. One possible scenario is this. The Fed is forced to lower rates this spring due to subprime problems. This in my view only helps the inflation argument, due to the fact that what is really needed is a rate hike to continue its drive to "take the punch bowl away" and this lowering of rates is inflationary. If I am right, while gold suffers short term, it will do fine longer term if the fed does in fact move to lower rates. I am a buyer of gold today by buying AUY.