Funny thing is that the equities markets (especially in the US) are actually hoping for inflation, because it would be a signal that companies are clawing back some pricing power in their markets. As such with inflation coming through you would probably have the short run effect at least of USD dollar strength in the through overseas support in an equities market rally.
On the face of it this would be bad for the gold price, but as Rivi says, the further down the track and the worse the inflation gets, the worse it would be for equities because of the affect on the economy of increasing interest rates.
Add to this the probability that the inflation is less a sign of company pricing power, and more a sign of rising oil prices the case for equities strength in the long term falters.
The devaluation of the USD is the only way the US economy can build strength imo - the only real path to reducing the current account and achieving sustanied economic growth imo. Its amazing how in a completely free and floating international market things even themselves out though
