Investors fearing inflation ought to buy gold, right? Actually, they may be better off with lowly nickel. As the economy has perked up, nickel prices rose from less than $5 a pound in April to more than $7. Chinese buyers have stockpiled the mineral, used in producing stainless steel. But gold's down from about $1,000 an ounce in February to $935. Why the split? BMO Capital Markets strategist Bart Melek cites higher inflation-adjusted rates on longer-term bonds. "As yields rise, the relative cost of holding gold rises," he says. Also, some expect the Federal Reserve to hike interest rates to keep inflation in check. Even if the Fed waits until 2010's second half, Deutsche Bank ( (DB)
) analysts expect gold to struggle. They say it tends to underperform industrial metals when general price levels are reinflating. Melek says nickel miners like Vale ( (VALE)
), whose shares have spiked since the winter, to about 19, are a good bet.