By Melissa Pistilli-Exclusive to Silver Investing News

Although October proved to be a brutal month for investors and the mining industry, there are promising indicators giving hope to some that the worst has passed for the precious metals sector and we may soon be on the road to recovery.

The dollar highs oppressing precious metals prices have fallen over the last few trading sessions, dropping lower against the euro on Monday.

“The reversal in the dollar’s recent strength could signify that [gold prices] are close to lows,” said Gold & Silver Investments executive director Mark O’Byrne.

In his Gold Investments Market Update this Monday, O’Byrne points to the improving performance of the precious metal mining shares as “an indication that we are at or near a low in this sell off.” The HUI and XAU mining indices, which O’Byrne cites as leading indicators of precious metals trend reversals, were up last week 14.4 per cent and 14.95 per cent respectively.

Other indicators cited by O’Byrne include gains in IShares Gold Trust (0.4 per cent to $71.85) and iShares Silver Trust ETF (2 per cent to $9.77), “the stabilisation of oil in the mid to high $60s”, and “massive physical demand, delays, shortages and surging premiums in the bullion markets.”

According to Peter J. Cooper of SilverSeek, iShares Silver Trust holdings have experienced massive selling pressure to the point that the trust has added a total of 68,921,884 ounces of silver to its holdings this year, which is 52.4 per cent of all the silver metal that the COMEX futures market possesses. “That surely represents amazing buying pressure at a time when silver prices are crashing,” says Cooper.

Resourceinvestors.com has reported that over two million ounces of silver has left the COMEX in the last five trading days. This may be due to the rising trend of investors actually taking delivery of their physical silver contracts in order to take advantage of bargain paper prices and high physical premiums. “How long before that trickle becomes a flood and the futures market in silver is effectively shut down and the physical spot market takes over?” Cooper asks.

Silver ETF’s, futures, and physical plays aren’t the only options for smart investors looking to get into the silver market before the projected trend reversal takes off. Although many are turning away from mining stocks, savvy investors should consider taking a closer look at extremely undervalued miners with strong fundamentals in place and the potential to profit the most from a turn around in precious metals prices.

Coeur d’Alene Mines Corp.

Coeur d’Alene Mines [TSX:CDM; NYSE:CDE] is a prime example of an extremely undervalued precious metals miner that has great potential to profit from the developing supply/demand issues in the silver market.

Monday, shares of Coeur d’Alene on the NYSE were trading at .67c, significantly down from the company’s 52 week high of $5.18 early in the year.

The Idaho-based miner is one of the world’s largest silver producers, as well as a significant gold producer. The company expects to produce 13 million oz. of silver this year and 24 million in 2009. Coeur d’Alene boasts a geographically diverse portfolio with operations and exploration projects in Nevada, Alaska, Chile, Argentina, Bolivia, Australia, Mexico and Tanzania.

Coeur has a substantial, proven and probable mineral reserve base of over 278.8 million oz/Ag and 2.2 million oz/Au. Measured and Indicated resources include 144 million oz/Ag and 1.1 million oz/Au.

In spite of the global financial crisis and its brutal treatment of the mining industry over these past months, president and CEO Dennis Wheeler remains optimistic. “”Overall, we continue to see a positive supply/demand fundamental picture, particularly on the supply side.”

As many in the silver market have pointed out, 70 per cent of total world silver production is actually a by-product of mining mostly base products, but gold as well. As base metals such as copper, lead and zinc experience further drops in price, miners will be forced to cutback on projects as low prices and a lack of access to capital curtail new developments. This slowdown in the base metals sector will undoubtedly lead to a slowdown in silver production.

As investment demand for physical silver grows and available supplies are depleted, silver producers like Coeur d’Alene stand to benefit once the trend reversal in the precious metals sector picks up steam.

Despite the impact the global commodities and equities sell-off has had on the mining sector, Coeur included, the company holds a positive outlook “that as the markets settle and economies stabilize, the underlying fundamentals of [Coeur], the strong asset base, and the growth plan at Coeur will clearly be recognized in a more orderly marketplace,” said Wheeler.

Currently, Coeur is developing its Palmarejo silver/gold project in northern Mexico. The project is anticipated to be amongst the largest of new silver mines in the world upon production commencement in the first quarter of 2009. Unlike other companies who’ve had to put their projects on hold due to financing problems, Coeur is adequately funded with $120 million in cash to complete the Palmarejo project, which should produce 5.1 million ounces of silver and 67,000 ounces of gold in its first year.