soft jobs number making gold and market bounce as now people are thinking qe will continue. if it does gold has a reason to go higher, but the market? it is walking the plank. i am marveling how sensitive traders are to this noise. yellen won't change course, that would be too much like obama's meaningless 'red lines'.
One disconnection in your message is: Inflation is a linear function interest rate. That meant when interest rate goes up, inflation is moving in the same direction vice versa. And when inflation is high, the dollar will be de-valued.
Please read about Fisher equation. It is named after Irving Fisher,