The silver price today is down about $0.53 to $13.85. That's nearing a 12% slip for 2015.
The silver price showed renewed strength last week after coming off a volatile week when the U.S. Federal Reserve raised rates. Silver's price swung nearly 4% or more in a single day... three separate times.
After that week ended on a high note with silver closing at $14.08, the metal continued higher as the holidays approached.
Here's a closer look at where silver has been trading and what that tells us about what's next...
What's Moving the Silver Price Today
The silver price last week started trading in New York around $14.10. By Tuesday's close, it was up a little to $14.25.
Here's a 30-day silver price chart ending Dec. 24:
And here's what the U.S. Dollar Index did during the week leading into the Christmas holiday:
The strength in the DXY helps explain silver's action earlier in the week, but interestingly by Wednesday, when it staged a bit of a rally to around 98.60, silver still managed to maintain strength around the $14.30 level.
What's most interesting to note in the DXY is the continued weakness since peaking just over the 100 level a few weeks back.
Since then, and despite the much anticipated Fed rate hike, the DXY has been gradually drifting lower.
On Thursday, Dec. 24, the last trading day of the week, silver drifted slightly higher on low volume through the day to start at $14.30 and close at $14.38.
That same day we got market news that could be bullish for the silver price in 2016...
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A Change to Silver Trading Will Move Prices
That's when the CME Group announced that margin requirements to trade silver futures on the Comex division of the New York Mercantile Exchange would be cut.
Starting today, Dec. 28, new contracts for the 5,000-ounce silver futures require margin of $5,720, down from the previous $6,600 level. For traders to maintain existing positions as well as hedge positions, margin requirements fall from $6,000 to $5,200.
While this move will not by itself push silver prices higher, it does make it a bit easier for traders to participate in this market. As well, these kinds of moves by the exchange do tend to come at price levels that are typically at or near extremes, which in itself is anecdotal evidence pointing to bottoming.
And thanks to silver prices bumping off four-and-a-half-year lows, the U.S. Mint has set a new record. The Mint recently announced that its sales of the American Eagle silver coins managed a new high for the third year running.
The Mint's recent press release stated, "Once again, global demand for the American Eagle Silver Bullion Coins drove sales to a record high, this year reaching 47,000,000, surpassing the 44,006,000 ounces sold in 2014 and the 42,675,000 ounces sold in 2013... The mint broke last year's record Nov. 30 when sales reached 44,666,500."
What's especially noteworthy is that since the Mint's been producing the silver Eagle, it sold anywhere between 3 million and 10 million ounces annually over the first 22 years. But since 2007, sales have skyrocketed from just under 10 million units in 2007 to 44 million in 2014.
Physical demand for silver remains strong, as evidenced by persistently high coin and bar premiums. And that has been the case despite low silver prices and weakened exchange-traded fund (ETF) holdings.
So the overall prospects for silver prices are promising, despite the ravages of a four-and-a-half-year-long cyclical bear market. Looking forward, 2016 could well hold the key to renewed fortunes for the silver price.
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