Share By Melissa Pistilli-Exclusive to Silver Investing News

The seasonal patterns characteristic of the latest bull run in precious metals were thrown off course last year as the economic crisis exploded and commodities across the board took massive hits. What technically should have been a memorable fall rally for precious metals prices will instead be remembered as one of the worst global financial meltdowns in modern history.

As worldwide economic recovery gains momentum and demand for commodities begins to re-emerge, are we likely to see a return to the traditional seasonal patterns for precious metals, particularly silver?

Last year being an anomaly, for nearly a decade August has proven to be a great time to purchase silver and gold as prices dip significantly before rallying in the fall, noted Brad Humphrey and Bart Jaworski, both analysts at Raymond James.

A look at the technical charts reveals that 2009 may be setting the “seasonality” of “excellent buying opportunities” for the last decade back on track. Humphrey and Jaworski recommend using the anticipated dip in prices over the coming weeks as an opportunity to pick up gold and silver equities at a discount.

“Balance sheets have been repaired following the recent credit scare, interest rates are low and input costs have stabilized and in some cases are declining,” said the analysts. “In a rising gold price environment, precious metal equities should be well positioned to expand margins and generate cash flow growth.”

Some of their top picks include silver companies such as Pan American Silver Corp. [TSX: PAA; NASDAQ: PAAS] and Silver Wheaton Corp. [TSX: SLW; NYSE: SLW].

The table below shows the share prices for a selected group of silver companies including First Majestic Silver Corp. [TSX: FR], Endeavour Silver Corp. [TSX: EDR], Pan American, Silver Wheaton, and IMPACT Silver Corp. [TSX.V: IPT]. The values shown are from near the end of the second quarter (June 11) of 2007, going into the August dip (10^th and 20^th) and during the height of the fall rally (November 15). Silver spot prices are shown in parentheses next to the corresponding date.

As was the case for much of the most recent precious metals bull cycle, shares prices for 2007 tended to follow the seasonal pattern of the spot price, dipping late in August and rallying back in November.

2007 Silver Share Prices

Company Jun 11 (13.11) Aug 10 (12.79) Aug 20 (11.75) Nov 15 (14.43)

First Majestic $4.22 $4.18 $3.39 $4.46

Endeavour Silver $5.01 $5.11 $3.68 $4.27

Pan American* $28.60 $29.32 $23.32 $32.23

Silver Wheaton* $11.86 $14.19 $11.91 $14.72

IMPACT Silver $1.76 $1.60 $1.38 $1.70

Can we expect the same pattern for 2009? If so, the next few weeks may truly be an excellent buying opportunity. Many of these companies remain undervalued relative to the price of silver as seen by comparing current company share values with those posted in November 2007 when the silver price was nearly the same as today’s.

2009 Silver Share Prices

Company Jun 10 (15.20) Aug 11 (14.32) per cent down from Nov 15 07

First Majestic $2.41 $2.27 -49 per cent

Endeavour Silver $2.20 $2.13 -50 per cent

Pan American* $24.64 $21.03 -35 per cent

Silver Wheaton* $11.30 $10.35 -30 per cent

IMPACT Silver $0.66 $0.71 -58 per cent

*TSX-listed price

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