"when the US Fed prints over $1 trillion a year you'd expect exactly what the gold bugs are saying but it isn't happening. The US barely eaking out 2% inflation and more recently that has dropped to 1%. So what gives?"

What gives ( I think you understand part but not completely imo) is that US is importing way more than it can affort to pay for so they print more money to do so. When something is in over supply it's value drops, so the dollar should drop. To forestall that, the US is dumping onto all the alternatives to the dollar. That means dump on precious metals (the real money) and gold in particular.
Of course they have a limited supply of physical gold ( and probably none remains now ) so they substitute with 'paper gold' and as long as the world swallows that bait we have what you see.
That action while forestalling, makes the degree of collapse later even greater.
Obviously 'Gold on paper' should not be used to determine the price of gold bullion, it is pure gambling and a fraud (imho).

"I actually think the opposite is true and we could see commodity prices cut in half before things improve." Well that has happend and yes the prices still could go down in the shorter time. However I think that the depreciation has gone as far as it can because the tank is running on near empty so they are lucky so far to sustain present pricing.

China is by no means a flop and is accepting dollars to turn them over into hard assets and the low priced precious metals. It works to their advantage to have metals priced this low. It eases the cost of transfer of that wealth from the west to them. Once the gold and silver supply runs dry you will get the long awaited prediction of the 'gold bugs'.

Patience, it will blow like a previously steaming volcano.