Investors hoping for a silver lining to the current economic downturn might be feeling some surprise as they watch precious metals, and the firms that mine them, suffer right along with the stock market.

Gold, which had been enjoying a wild ride up in recent months, has dipped along with the broad equities markets-an unusual development for analysts who normally expect the regal metal to be a safe choice for investors trying to ride out recessionary days. Instead, gold, along with silver, has behaved uncharacteristically-and the metals are taking the mining companies along with them on the roller coaster.

"Gold prices in all markets have been very volatile all year," says Carlos Sanchez, precious metal analyst with the CPM Group, a research and consulting outfit based in New York. "Part of it is because of mixed investor sentiment. Some are hoarding cash, some buying gold, some silver, some doing nothing at all. So they're riding prices, and that's why you're seeing this volatility."

Still, most analysts are very bullish on the sector, and believe that in the long-term, both the metals and the firms will trend higher. "Gold has been in a stealth bull market since 2001 and will continue to rise for a variety of reasons," says Leo Larkin, equity analyst with Standard & Poor's. He points to Newmont Mining in Denver and Canada-based Barrett Gold as two firms that are expected to do well. "It's traditionally a safe haven investment."

And prices for gold, although incredibly volatile at the moment, are expected to rise even more. Patrick Chidley of Barnard Jacob Mellet Securities points to the fact that gold companies aren't reporting record profits-to him a sign that gold isn't actually running that high. He also notes that gold traded at $858 an ounce in 1980. That's close to current prices, and with inflation could easily run higher. "Yes, these reactions [in the gold market] haven't been obvious," he says. "But unfortunately some traders have come to believe that gold is the same as the euro. And it's not, it's a hedge against the dollar."

But, silver could have a bumpier road ahead, especially if the industrial sector starts to follow commodities and production slows. With silver used heavily in industry, demand for the metal could wane and affect mining firms. "We do expect silver to rise," says Sanchez. "But the expected economic slowdown could have an effect on manufacturing, and industrial demand may not grow as expected." However, Sanchez notes that silver could break away and start trading primarily as a currency.

Other metals such as platinum and palladium are also fluctuating, but their primary use in the auto industry as a catalyst to remove emissions is weighing hard against their value as the auto sector falls into sharp decline, especially in the United States. "Seventy percent of the [palladium] produced is used in auto production," says Sanchez. "We don't expect it to rise like gold."

To be sure, with the chaos surrounding the market, gold may not break pricing records but it's unlikely to tank. "We may not know the value of certain mortgage-based securities," says Jeffrey Saut, chief investment strategist for Raymond James & Associates. "But you do indeed know what gold is worth."