The sharp drop in share prices in America reversed itself late in the day yesterday, but fears of a further drop in the value of the dollar and a rise in commodity prices have not subsided.

The Dow Jones Industrial Average gained 47.78 points to 11428.77. This gain, caused by a turnaround in the Dow late in the day, followed a 262-point drop on Thursday and Friday of last week. The declines have caused some doomsaying in financial markets. While the doom did not come yesterday, there are still fears of a continued drop in the dollar, a rise in the price of oil and other commodities, and a drop in asset prices, including stocks and houses.

Yesterday, oil prices dipped about 4% to less than $70 a barrel, and gold dropped more than 5% to less than $700 an ounce. This apparent stalling in inflation encouraged large-cap share prices. Johnson & Johnson, Merck, and Wal-Mart were all sharply higher.

But a noted dollar bear, Peter Schiff, who is president of Euro Pacific Capital, sees yesterday’s events as a pause in the rising price of commodities from oil to precious metals and the greenback’s ongoing decline.

“It [the dollar] is dangerously close to breaking through a key level,” Mr. Schiff said. Once it breaks through that support, he sees a sharp rise in inflation in America and a decline in real estate prices.

This trend will be caused in part by the pause in the interest rate increases ordered by the Federal Reserve, combined with interest rate hikes in European countries and Japan, Mr. Schiff said. A cheaper dollar will be necessary to reduce America’s current account deficit. Finance ministers from G8 countries are now speaking somewhat vaguely about global “imbalances.”

Such talk is code for America’s trade and current account deficits, Daniel Katzive, an economist who specializes in foreign exchange strategies at UBS, said. In practical terms, there has been some monetary tightening in low-yield economies such as Switzerland and Japan. The effect will be higher interest rates in those countries, which will translate into less interest in investing in America, Mr. Katzive said. Comment by finance ministers about trade imbalances means they are willing to let the dollar trade lower, “though they would never say it,” he added.

“The effect [of a weaker dollar] will probably be rising inflation and a more difficult job for Bernanke,” the president of Leeb Capital Management, Stephen Leeb, said of the Federal Reserve chairman, Ben Bernanke.

The dollar has already slumped 6% against the euro and 8% against the yen this year. Part of the reason is an anticipated end to interest rate rises by the Federal Reserve, switching attention back to America’s huge and rising debt levels. If inflation does spread, Mr. Bernanke may be tempted or forced to tighten the money supply, which could choke off the country’s growth.

Already rising long-term interest rates have caused a pause in the rise of real property price, or even a slide backward.

The National Association of Realtors is projecting a 6.4% decline in existing home sales, albeit from last year’s record level. New home sales are seen down 12% from last year. Housing starts are also projected to drop, though, again, from very high levels.

But while some market watchers, such as Mr. Schiff, see precipitous drops in both the dollar and real estate values, Goldman Sachs is projecting a strong global economy based on recoveries in Japan and Europe, as well as continued strength in China.

A Credit Suisse First Boston economist, Kathleen Stephansen, agrees. She projects an “orderly” drop in the value of the dollar against foreign currencies. “Because the global economy is strong, [depreciation in the dollar] can only support the export sector here,” she said. Increased exports can fuel the nation’s growth while allowing a reduction in now-record trade deficits.