The sharp move in gold, which set another record Monday, has helped fire up inflation concerns. Gold rose by almost $12 to hit $1,107.2 an ounce, compared with $1,095.7 at the previous close. Yesterday investors were also watching the spread between 10-year inflation protected securities and Treasuries move to the widest level in more than a year.

Gold prices in chaos, and it prices in inflation. Gold has been rallying for nine years in a row through times of inflation, deflation, lower stocks, and higher stocks.

Gold and other commodity prices have surged recently as investors have moved away from the US dollar. The dollar has fallen by 13% against the pound this year, and by 7% against the euro. Increased demand among emerging market governments looking to diversify their foreign exchange holdings has also pushed the price of gold higher. There is also higher demand from individuals. The price of gold is typically strong in the October to December period.

There is not much data of note out of the U.S until Thursday’s weekly jobless claims. Today there is also an auction of $25 billion in 10-year notes at 6 p.m. Five Fed officials are also speaking.

Jobless claims and unemployment data are released in the UK tomorrow, as well as the Bank of England quarterly inflation report.

The UK market has opened slightly positive whilst the European markets have opened flat. U.S futures markets are pointing to a flat to slightly negative start when their markets open this afternoon.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia: GaveKal:

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