Gold Rush.

Gold is weak once again this morning on this silly idea that the Fed is going to be a tough guy because the inflation data is finally beginning to show some of the inflation that's been there all along. Sure, the Fed may be forced at some point by the market to stop feeding inflation with more rate cuts, but the Fed won't be tightening anytime soon with the economy and financial system in the mess it's in.

This is the stagflationary. It's finally beginning to show up in the government's data (which is a feat in and of itself), and stagflation is probably the most bullish environment for gold known to man.

The interesting thing that jumps out at me about gold this morning is that it's finally beginning to break free of its euro and dollar-related shackles. Gold has been rallying in all currencies, including the euro, but it has had a rather tight correlation to the euro over the past six months (and as a result, a negative correlation to the dollar index). This morning, however, that appears to be in the process of changing.

Note that while the dollar index has made a new one-month high and the euro has made a new one-month low, gold is resisting the decline in the euro (and the rally in the dollar) and not following the euro to a new one-month low of its own.