^[1]By Melissa Pistilli-Exclusive to Silver Investing News ^[2]

The silver price endured further losses Monday brought on by the impact of a stronger dollar and cuts in crude oil. Precious metals price rallies are usually disrupted by gains in the dollar and easing oil, which reduce safe-haven investment appeal.

Dollar strength has hit commodities across the board as they become more expensive for holders of other currencies.

Statements out of the G8 Finance Ministers meeting in Italy over the weekend expressed confidence in the greenback, pushing the dollar towards gains against the euro and other major currencies.

Particularly of interest were comments from Russia's finance minister Alexei Kudrin on the heels of Russia's President Dmitry Medvedev's questioning of the dollar's status as the global main reserve currency. Kudrin said the dollar is in "good shape" and "it's too early to speak of an alternative."

Bloomberg ^[3] notes that the Russian Finance Minister's comments "underscore the dependence of Brazil, China, Russia, and India on the currency of the U.S., the world's largest economy and a $2.5 trillion export market." Bloomberg also points out that these four nations have increased their foreign reserves by more than $60 billion last month "to limit their currencies' gains and support their exports. They now have combined reserves of $2.8 trillion and are among the largest holders of Treasuries."

Still, optimism concerning the overall outlook for the precious metals remains high. Signs of global economic recovery remain muted, inflation concerns are ongoing, political upheaval in the Middle East continues, and further nuclear threats out of North Korea are all helping to support bullion prices.

"The dollar is going to put a little bit of pressure on gold," said Bernard Sin ^[4], the head of currency and metals trading at Swiss refiner MKS Finance SA. "The dollar may rebound in the short term, but longer term it's going to continue to weaken."

Highlights: The Gold Report Interview with "Mexico Mike"

Recently, The Gold Report interviewed Mike Kachanovsky (Mexico Mike), junior mining stock analyst and Investor's Digest of Canada columnist. Kachanovsky discusses investing in silver mining companies versus physical silver, advantages of investing in Mexico, strategies for investing in silver mining stocks and some of his favourites.

In relation to investing in physical silver, investing in silver mining companies "tend[s] to deliver stronger gains in a bull market than do the metals themselves," noted Kachanovsky ^[5].  "So, for example, if you'd expect that silver is going to double in price in the next couple of years, you'd probably expect that the mining companies that are leveraged to silver would go up five or 10 times in value from where they are at today, just because they have that greater leverage than the metal," he explained.

Amongst precious metals miners, Kachanovsky is strongly drawn to those operating within Mexico, which he calls "an ideal place to look for junior mining stocks." Why? Mexico's mining industry is experiencing a "renaissance" that has seen many junior mining companies benefit from the nation's "strong resources, low mining costs, and favorable mining laws."

In terms of strategies, Kachanovsky recommends investors consider those junior miners actually producing and with recurring cash flow or earnings. "These companies are probably the better performers because they don't have to rely on outside sources of funding in order to advance their business model," he said.

Look for those miners that are self-financing because they carry less risk. "They'll be able to continue their operations because they can still find the money they need to keep moving forward," adds Kachanovsky.

If you're considering investing in companies primarily focused on exploration, you should be aware of the associated risks. While such companies offer investors a way to purchase mining stocks at a bargain, they often have a harder time acquiring financing. The risk here is that "they could default on the terms of their projects, and may even face the risk of getting delisted or go out of business," he said.

Kachanovsky advises investors to look for companies with a positive cash-flow, are actively growing their resource, possess strong balance sheets and experienced management.

Mexico Mike's silver miner picks include:

Impact Silver ^[6] [TSX.V: IPT]. "The number-one junior mining stock in the world, in my opinion. . . it's one of the few junior mining stocks anywhere in the world that's been able to report recurring earnings-not just positive cash flow-but actual net earnings."

On Monday, shares ^[7] of Impact Silver on the TSX Venture closed down 4.29 per cent to .67 cents.

First Majestic Silver Corp. ^[8] [TSX: FR].  "First Majestic is attractive to me now for reasons similar to Impact-it's trading near the lower end of its range, and it's a high-quality company. For people who are bullish on silver, First Majestic should one of the companies they circle on their short list."

Monday, shares ^[9] of First Majestic on the TSX closed down 7.2 per cent to $2.32.

Avino Silver & Gold Mines Ltd ^[10] [TSX.V: ASM]. "Avino is interesting because it's one of the few companies that was active all the way back to before the mining law in Mexico was revised. Currently, they own about 86-87 per cent of that project. So, they're one of the few companies that has been active with an unbroken ownership interest in Mexico through the bad years and now into the good years. I also like the fact that it's been very stable in its share structure."

Monday, shares ^[11] of Avino on the TSX Venture closed down 2.78 per cent to .70 cents.