Minutes ago the Federal Reserve Board cut the overnight discount rate to 2.25%. At first, this did not meet with the expectations of Wall Street traders, or perhaps their imaginations. The Dow, which was up about 300 points during morning trading as reported earlier, moved a bit lower. However, it soon recovered and is moving up again.

Where we will end up is strictly guess work but this market is not one of conviction, so I expect the retreat to continue at least to a level such that the fearful will not want to be over-weighted overnight. Nobody wants to fall victim to news headlines and many will want to lock in whatever profits they can for the day.

Lower rates mean a lower dollar, and most likely more upward pressure on gold prices, which topped $1,010 an ounce today. I am not a gold expert but I would not be surprised to see the precious metal higher going forward, given the Fed's abandonment of inflation concerns -- at least for now.

UPDATE: Dow FINAL up 420.41 points to 12,392.66 (3.51%)

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture and planning firm. He writes Chasing Value and Serious Money columns.

It was only yesterday that I wrote about Freeport McMoRan Copper & Gold (NYSE: FCX), noting the favorable metrics and that I put it on my watch list. And this morning I find that Gold & platinum prices soared to new highs, with gold futures setting a new record of $952.40 an ounce.

It seems investors the world over are rediscovering the precious metal after years of neglect. How could you expect anything else with social unrest, war and recession fears on the front pages of every newspaper, with China and India growing rapidly, placing high demand on all commodities, and with a head-in-the-sand administration just now lifting itself up to take a gander at the last few months of its dubious leadership.

Despite recession fears, there is also the serious possibility of dramatic inflation in the next few years based on deficit spending, the ever expanding federal government and lack of concern for the value (buying power) of the currency. It's pitiful. Gold has been an historic hedge against inflation, so why should now be any different?This has ignited one of my 2008 picks Chasing Value: Anglo American (AAUK) is down...but!, which has moved up sharply in the last week.

I do not know where the ceiling is on gold prices, but it does not seem historically high, and I still think AAUK and FCX belong on everyone's watch list.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of AAUK.

In case you hadn't noticed yet, we are definitely in the midst of a modern day gold rush. Gold prices have been rising strongly again today, with February gold futures moving up as high as $871.20.

There are two main reasons why people are quickly moving into the precious metal. One is the fear a possible recession on the horizon. Any time you enter into a period of economic uncertainty gold becomes a favorable avenue for people's money. The more obvious and in your face explanation for the recent gold rush is the weak U.S. dollar. The weaker the dollar gets, the more favorable gold will be to investors.

Will gold continue to move higher? I think so. Right now America is facing a pretty discouraging mortgage situation. How bad things are going to get is anyone's guess, but you can be sure of one thing: the Fed will do anything it can to keep the economy in "good shape".