Silver has had 4 major sell offs/crashes over the last 10 years which were in 2004, 2006, 2008 and this year, 2011. For the 04, 06 and 08 sell offs, 2 years of the 3 had rallies into the 4th quarter. (04 and 06 which dipped in December).
A yearly chart of 2004 from Kitco:
A yearly chart of 2006 from Kitco:
A yearly chart of 2008 from Kitco: (Financial Crises Crash year)
A yearly chart of 2011 from Kitco: (Up to October 7th, 2011)
Will the Silver spot price follow the rally of 2004 and 2006? Or will it follow the 2008 chart and dip yet again for a small rally in December? Mark Twain has mentioned 'History doesn't always repeat itself, but often rhymes".
With the debt issues in Europe, both Gold and Silver _should_ go up. But when investors are loosing $$$ on other stocks, commodities, currencies, etc,,, they will sell their Gold and Silver to cover the losses. This can lead to a temporary sell off with the metals, even if they should fundamentally go up.
With that said, I'm leaning towards the rally side for the 4th quarter, but it is really anyone's guess. Especially when you have bullion banks with hundreds of millions of dollars to move the futures markets. When they need to cover a short position, they can drop the market 25% + in a matter of a few days.
Gold is up 14.75% YTD
Silver is up 5.74% YTD