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Why are Silver and Gold Rallying?

Since August 14th, silver and gold have gained immensely - literally, the two metals haven't been in this territory since last May.

Silver reached above 23.95 $, gold almost touched the 1,400 $ level by achieving a maximum of 1,399.90 $.

Precious metals traditionally rally towards summer's end, especially in August. It's typical for the two metals to grow.

The US dollar index dropped, the euro gained against the dollar, reason for gold's near-1,400 $ level achievement.

The US housing report was below expectations, the eurozone's consumer confidence figures rose, which strongly influenced gold's price.

Is a Bull Market Starting?

Could the bear market be over? It's a likely possibility. Gold and silver will also be affected in September, when we'll find out more about possible tapering of the monetary easing by the Fed. We'll also have to watch developments in Europe, following the German elections - these will impact the euro's fate.

Should the euro gain strength, the dollar will weaken and precious metal prices automatically rise.

If the euro weakens significantly, then it will happen vice-versa and silver and gold prices might dip again.

The biggest punch could come as a mix of between weakening euro, positive US economy figures and a reduced quantitative easing decision from the Fed.

Because: the Greek economic crisis is deepening and the support for further bailouts are running out. It's highly likely that the euro crisis will deepen during this autumn.

Also: if the US economy produces stronger results, the Fed has promised, they might consider cutting the monthly easing.

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