Will Silver follow a Bullish Gold?

Gold is down but not out say analysts and, of course, mining presidents. The recent rally of gold that sent the price to 26 year highs has seemed to cool down in the last month dropping the price back down below $600 an ounce signaling an end to this portion of the bull market. Silver also saw record highs as it followed suit right with gold shooting above $15 an ounce before settling back in around $10, still a high price.

In a recent article found in Rocky Mountain News titled Newmont says gold rally will resume after September a prominent Gold Mining president, Pierre Lassonde said that gold will become bullish again after September. He claims recent pullbacks to the gold market came after the steadily declining dollar slowed it’s decline this last month causing investors to take their money out of gold and put it elsewhere.

The reasoning. A dollar that essentially has no where to go except weaker. To quote the article directly:

A widening U.S. deficit means more dollars need to be converted into foreign currency to pay for imports. It also indicates the dollar may need to weaken to make U.S. exports cheaper and imports more costly to close the gap.

This all makes sense and definitely plays on the fears of many investors as well as those seeing only red for the US economy. However, this is more of a doom and gloom outlook for the dollar and some say the rally for gold and silver is over and the bull market that many say will surpass $1000 and ounce gold and $50 and ounce silver, we’ll wait on see.