Gold prices declined early last week before rallying and closing at $1,838.10 per ounce. This two-week consolidation at the weekly 50-day moving average lays the groundwork for a breakout toward the resistance found at $1,950 per ounce. The Federal Reserve’s response to inflation, a key indicator for the price of gold, seems to be a coin toss. Some analysts think it will be “heads,” that the Fed will raise interest rates to combat inflation. According to business news site MoneyControl.com , “The precious metal came under pressure as the US dollar recovered. The dollar recovered last week as a stronger-than-expected consumer prices data stoked inflation concerns that could force Fed to raise interest rates.” Some are going with “tails,” that the Fed will see any surging inflation as “transitory” and keeps interest rates low. Says MoneyControl.com, “‘Gold bulls were driven by inflation worries after US Consumer Price Index grew by 4.2 percent in the 12 months to April for its largest increase in almost 13 years,’ [says] Tapan Patel, Senior Analyst (Commodities), HDFC Securities. ‘The dovish Fed stance and slower US economic recovery are the key bullish factors for gold prices.’” The results of “heads,” considering the interest costs of the government’s massive debt, suggests the Fed may be using a different coin altogether, one which has “tails” on both sides. Rick Andrews is president of Avant Capital Management.