By Melissa Pistilli-Exclusive to Silver Investing News

On Tuesday, the silver price hit its lowest level in nearly a month as the equities market rebounded. The S&P 500 Index rose 1.5 per cent. “Another sector rotation could take place with speculative funds abandoning safe-haven assets to pile into oversold equity markets,” said Jon Nadler, senior analyst at Kitco Inc.

The price of silver is as much tied to gold as it is to the industrial sector and if gold continues to slide, silver may as well. “Silver is drawing its strength from gold,” said Philip Gotthelf, the president of Equidex Brokerage Group Inc. “If gold doesn’t move up anymore, then silver is in trouble.”

The movements in the silver price over the past weeks are indicative of its “typical role as a high beta precious metal,” said John Reade, a UBS AG metals  strategist, “gently outperforming gold when both are strong, while underperforming less gently when both metals correct.” Reade predicts silver will trade at $15.75 within a month and $17 within three months.

Silver has outperformed gold since October in their respective main exchange-traded funds. The Gold SPDR Gold Trust ETF has risen nearly 15 per cent and I-Shares Silver ETF has been up about 25 per cent.

Despite this week’s gains, the equities markets are still quite volatile and many analysts believe gold will recover on safe haven demand bringing silver up with it. Movement in the US dollar often correlates with precious metals prices. If the dollar reaches 90 against the six major currencies, gold will rally, according to Ralph Preston, Heritage West Futures analyst.  ”I’m going to look for gold to firm on dollar strength,” said Preston. “Gold will be competing with bonds and the buck for safe-haven status.”

Silver: More Room for Growth than Gold

The host of CNBC’s Mad Money, Jim Cramer, believes “silver has more room for growth than gold.” Cramer points to the current “spenda-palooza” of bailouts and stimulus cash pouring out of Washington and the impending inflation that’s bound to follow as assurance that there is still “a lot of steam left in the precious metals market.”  Those who invested in silver for the long-term back in 2000 have experienced earnings of 240 per cent, compared to 190 per cent for gold and a paltry 35 per cent for the S&P. And today’s low prices offer investors “the opportunity to get in on silver while there is still room for growth,” he said.

To make your silver play, Cramer suggests the I-Shares Silver ETF as “a quick and easy way to get in the game” or the tracking stock PowerShares DB Silver. Also, silver stocks such as Silver Wheaton [TSX: SLW] or Pan American Silver [NASDAQ: PAAS] have excellent “growth prospects.”

 Coeur D’Alene: Silver Production to Rise in 2009

Last week, Coeur D’Alene Mines Corp. [NYSE: CDE] announced its fourth-quarter profit dropped as precious metals prices sank. However, the numbers exceeded analysts’ predictions. The Idaho-based miner’s shares on the NYSE climbed 11.4 per cent Friday morning on news that production rates are expected to rise in 2009. Coeur’s net income for the 2008 fourth quarter was $4.3 million compared with $14.3 million in the same quarter of the previous year. Revenue also fell for the same period from $59.9 million to $42.4 million. Despite the fact that the miner’s silver production was up 28 per cent over the 2007 quarter, there was also a 38 per cent drop in the average realized silver price from the same quarter. Fourth quarter average realized gold prices were also down 18 per cent from the third quarter.

Coeur’s management expects a turnaround in silver and gold prices as demand for safe-haven investments rises and the company has said it will be producing more of the precious metals this year at expected higher prices. Coeur anticipates silver production to increase by 66 per cent to 20 million ounces and gold production to rise 85 per cent to about 85,000 ounces. This month, operations at the new Palmarejo silver and gold mine in Mexico are set to commence and the company’s San Bartolome mine is starting its first full year of production. On Wednesday, shares of Coeur D’Alene Mines on the NYSE were trading at .68 cents, down from a 52-week high of $5.16.