Silver is staging a comeback.

Bargain-priced American Eagle silver coins and other silver investments have been gaining sales momentum in 1991. Furthermore, a recent modest rebound in price just might indicate a silver rally is coming somewhere down the line.The jump in sales of the one-ounce silver dollar Eagle coins began as the market began a slow descent toward a 17-year low of $3.50 an ounce in February. Prices looked good to investors and speculators. After showing some encouraging improvement, the price most recently has hovered around the $4-an-ounce level.

"More than 5.3 million ounces of silver Eagles were sold from December through March, making this the best-selling silver coin ever," said Donna Pope, director of the U.S. Mint. "The affordability of the coin when silver fell below $4 started it, but demand remains healthy and is likely to grow as more investors become involved."

As with the Eagle gold coin, some sales gains were tied to the increased patriotism of the gulf war period. However, most buyers were doing more than simply flag-waving. They know that silver coins, inexpensive to begin with, can readily be bought at banks and coin shops. In addition, there are improving market fundamentals at work.

"It's a good time to buy silver coins because there really isn't much downside risk at current price levels," said Alan Posnick, senior vice president of New York-based MTB Banking, who expects a trading range between $3.75 and $4.50 an ounce through year-end. "Silver will outperform gold and platinum in terms of total return on investment for the next several years."

The silver Eagle remains the most popular way to buy silver, and it's possible to purchase that coin for $1.25 to $1.50 over the silver spot price. Next in popularity, but usually carrying slightly higher premiums, are the Silver Maple Leaf coin from Canada and the Silver Libertat coin from Mexico.

"Longer-term, silver has a lot of emotional appeal, and the general public won't get very interested in it until it gets over $5 or $6 an ounce," said Walter Perschke, president of Chicago-based Numisco Rare Coins Inc. "I personally believe investors will have the opportunity in the next six months to buy silver at $3.80 an ounce or lower, and, at those prices, I'd definitely be a buyer."

Investors can most economically buy silver in small bars of one-ounce, 10-ounce and 100-ounce sizes, Perschke believes. That's because such bars are closer to the actual silver content price than are the Eagle coins.

"With a moderate economic recovery, we'll see silver prices in the $4.50-to-$4.75-an-ounce range, but, with a stronger recovery, the price will go much higher," predicted Bette Raptopoulos, senior metals analyst with Prudential Securities. "I would be a `scale-down' buyer of silver at current price levels and whenever it might slip lower."

The recovery of silver has been relatively modest because worldwide supplies are still more than ample, said Raptopoulos. That large supply has been the cause of silver's weak pricing for some time.

The $50-an-ounce price range of the early 1980s was far from the norm, brought about by a high rate of inflation. Its price then fell quickly to the $17-an-ounce range, remaining there before beginning its gradual descent to that remarkable $3.50-an-ounce low set in February.

In Raptopoulos' opinion, coins and bars remain the best ways to buy. The stocks of silver-mining companies and also the futures markets are two riskier ways of purchasing silver that could conceivably provide a big return for a small investment. But she warns that there is considerable volatility in those rather speculative choices.

New silver Eagles are sold as an investment, with the price of the coin varying each day based on the silver spot price, Pope of the U.S. INVESTINGContinued from D?

Mint pointed out. They aren't sold directly by the U.S. Mint, but through a network of 40 distributors that buy from the Mint in 50,000 lots.

"The consumer should shop for the best price, since it is always fluctuating," concluded Pope. "And remember that, unlike commemorative coins, there is no set limit on the number of silver Eagles produced."

Silver, like any other precious metal, can boost your spirits or break your heart. But its lower price tag makes any pain somewhat easier to bear.