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Gold resumes its inverted relationship with oil. Rising oil forces oil importing countries to sell some of their gold reserves to cover oil costs (Turkey, Bolivia, Ghana, Uzbekistan). Rising oil leads to higher inflation, eliminating the need for the Fed to cut rates, which is not a positive outcome for gold and silver. If inflation rises but the Fed continues to signal at cutting interest rates (or to not raise rates), then this will be seen as causing more inflation. In this case, the bond market will "raise" interest rates via higher yields. Higher bond yields are seen negative for gold and silver. Especially if yields rise faster than inflation That is why it is important to understand what Kevin Warsh, the new head of the federal Reserve will say about inflation and interest rates on Wednesday. If he proves to be dovish -- and bond markets do not believe him, then we could see a selloff in bonds i.e. a rise in bond yields.