The reasoning is correct but the conclusion is backwards IMO.
You should "adjust for inflation" (using other measures for inflation) to examine the current price of gold. If gold is still expensive, either the inflation adjustments are incorrect, gold is mispriced, or external force is driving demand for gold.
Put another way, because gold is an "independent yardstick" for inflation, you have to "adjust for inflation" to draw any conclusions about the current price of gold.
You should "adjust for inflation" (using other measures for inflation) to examine the current price of gold. If gold is still expensive, either the inflation adjustments are incorrect, gold is mispriced, or external force is driving demand for gold.
Put another way, because gold is an "independent yardstick" for inflation, you have to "adjust for inflation" to draw any conclusions about the current price of gold.