Gold goes up with inflation and retains and increases in value...

Gold goes up with inflation and retains and increases in value during deflation. It becomes the magnet for people looking for an asset that isnt deflating in value. The opportunity cost for investing in gold is limited by property, bonds and stocks. Property has gone head to head with gold until the sub prime fiasco. Bonds lose coupon value with the rise of interest rates. The stock markets are an option but corrections quickly take the heart out of this option. Corrections in bonds property and stocks limit the investment choice and for 5000 years gold has always been the winner in the game of attrition.

Yes, gold is a good hedge for inflation but its a magnet during deflation. We can have it both ways but it need be an extreme occurence of inflation or deflation.