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By Melissa Pistilli-Exclusive to Silver Investing News

The silver price fell almost 6 per cent on Monday to its lowest level this month at $13.82 an ounce. The dip came as traders pulled out of the commodities and equities sectors and poured into the dollar on fears that economic recovery is still a ways off. Silver took a bigger hit than gold as its losses were also tied to downward pressure in the industrial metals.

The positive sentiments developing in the markets over the global economic outlook reversed direction this week after taking silver to a two-month high of $15.16 early Friday.

After a frenzied rally on the hopes that economic recovery in Asia would soon spurn demand for commodities, caution has once again returned to the markets. Disappointing data out of Asia and the US threw a bucket of cold water on dreamy-eyed investors. It seems they may have realized this global recession is not entirely over yet.

The reality is many consumers are still leery about spending, as weaker than expected U.S. consumer confidence data showed on Friday, and without robust consumer spending a true economic recovery is unlikely.

“The markets have been overdue a correction. They have run away with themselves, ignoring the basis of what was really going on,” said Howard Wheeldon, strategist at BGC Partners. “Recessions do not end in a day, a week or a few weeks, they take years and the process hasn’t run its full course yet.”

China, the developing nation seen as most likely to drive global economic growth, watched its Shanghai composite drop 5.8 per cent Monday; Its worst session in nine months.

On Tuesday, the silver spot price recovered slightly, battling to maintain $14 an ounce, as the latest gains in the dollar retreated on promising data from Europe and slight recovery in Asian equities and commodities.

Investor confidence in Germany reached its highest mark in three years as readings point towards economic expansion over the second quarter, said Kitco’s Jon Nadler. This news comes after France reported last week that its recession is almost over.

“The number of nations appearing to be finally making an exit out of the dark woods of 2007-2009 is growing, and along with them, the levels of confidence among global investors,” Nadler added.

As far as silver is concerned from here, Forex’s Anna Coulling puts it at “bearish” for the short term, “sideways” over the medium with a “bullish” long term outlook.

CMC Metals: “No-Brainer” Stock Pick

Canadian-miner CMC Metals Ltd. [TSX.V: CME] recently received glowing accolades from gold and silver mining expert and regular Kitco contributor David Bond.

After an interview with CMC Metals’ CEO, Don Wedman and reviewing the company’s “very conservative estimates of its silver stash, cost of production and decimal-point-defying ore grades, and a quiet heads-up from our most reliable stock-picker, we’re going to take a flyer on this no-brainer,” says Bond.

CMC’s wholly-owned Silver Hart mine and mill is scheduled to commence operations in the second quarter of 2010. The mill is expected to produce 80 tonnes/day and the company anticipates that upgrades to 300 tpd will be possible.

On the property, located in the south-central Yukon, CMC has exposed a 6.5 million ounces of high-grade silver averaging over 56 ounces per tonne.

“That’s about 5 times the cut-off grade here in the Coeur d’Alene District’s underground mines, except that this baby’s open-pit,” Bond explains. “CMC has blocked out an initial 9 million ounces of silver with a very nice 7.5 per cent lead and zinc component that knocks the extraction cost down to a very comfortable $4.45/oz.”

With more than 95 per cent of the 5200-acre property left to be explored, there exists great potential for further growing the resource.

According to Bond, twenty mineralized trench showings with visible massive galena are known already and only three of the 20 zones have been drilled. “Extrapolating the numbers a bit from what CMB already has blocked out, and you could easily be staring at a 55-million oz. deposit,” he said.

Shares of CMC Metals on the TSX.V closed at .26 cents on Tuesday.

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