For silver, being cheap is..

SAN FRANCISCO (MarketWatch) — Silver’s free fall may be coming to an end.

After a nearly 9% dive in silver prices this month, investors should be able to breathe a sigh of relief as growth in industrial and investment demand gains pace, and calls of “oversold” conditions and “bargain” prices for the precious metal intensify.

“Silver is grossly oversold at current levels, more so than any time in the past five years,” said James Carrillo, senior portfolio adviser for precious-metals investment firm Swiss America Trading Corp.

Silver futures prices SIH3 -0.90% have lost $2.65 an ounce, or 8.5%, this month, after closing at $28.70 Thursday on the Comex division of the New York Mercantile Exchange. Year to date, they’ve lost over 5%. That compares with gold’s GCJ3 -0.37%month-to-date loss of around 5% and a nearly 6% decline for the year.

“Fundamentally, silver should be rising,” as physical demand remains strong, said Carrillo. “However, the technical side of the market is dictating direction currently.”

Before Thursday’s 0.3% gain, silver prices had fallen for five sessions in a row—dropping nearly 8% during that losing streak and breaking a key support level by settling below $30 on Feb. 15. Prices closed Wednesday at their lowest since Aug. 20. The iShares Silver Trust SLV -0.72%  , which holds silver bullion, is down nearly 6% this year.

The absence of China last week due to the Lunar New Year celebrations “set the ball rolling and left the silver price at the mercy of the technical picture,” said Julian Phillips, a South Africa-based contributor to SilverForecaster.com. “I would expect a snapback just as surprising as the fall.”

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Beware ‘Credit Supernova’

Beware ‘Credit Supernova’ Looming Ahead : Gross

Pimco’s Bill Gross looks at the investing universe and sees a dangerous supernova – a looming explosion that could see investors lost in space.

The head of the Pacific Investment Management bond giant has issued an ominous forecast in which he worries that the global central bank-induced credit bubble “is running out of energy and time.” (Read MoreFederal Reserve Should Do Less, Not More: Morici)

As a result, investors will have to get used to an atmosphere of diminishing returns and portfolios that will hold more hard assets like commodities and fewer less-tangible financial assets like stocks.

“Our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic,” Gross said in his February newsletter.

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