Silver Price Outlook Heading into 2016

True to form, the silver price has made some wild gyrations lately.

The big news of course was what the Fed did last week. As expected, a 25 basis point hike came and went.

Despite considerable weakness late the previous week and then on Monday, Dec. 14, silver actually handily outperformed gold. It's leading to an interesting outlook for the silver price heading into 2016, and making it a must-watch precious metal for your portfolio...

Recent Silver Price Moves

Here's how the silver-price action looked on Wednesday, Dec. 16, the day of the Fed's rate hike announcement:


As you can clearly see, just after 8 a.m., silver shot up from $13.80 to quickly reach the $14.50 level. It continued to meander sideways before climbing higher.

Silver then reversed, dropping quickly to $14.10 just before the Fed announced its rate decision.  As those details were being digested, the silver price moved sideways again, but soon ran up once more, this time peaking at $14.30 momentarily.

And like gold, silver found renewed strength on Friday, shooting up from $13.80 just after 8 a.m. to $14.15 by 10 a.m. It then moved essentially sideways for the remainder of the day to close at $14.08.

The important part of this price action was silver's ability to once again regain and close above $14. Despite the recent closes below $14, silver is, on a technical basis, holding up pretty well.

This week it has remained above the $14 per ounce mark, trading around $14.28 today.

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It's true that the 50-day and 200-day moving averages are still trending downward. But at the same time, we have the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators both trending upwards.

So upward momentum for the silver price from this perspective remains positive.

If silver prices can manage to close above the $14.55 level of Dec. 4 and continue to trend higher, the closes below $14 may turn out to have been little more than "testing a bottom."

As expert trader Vince Lanci recently told Kitco News, "If you are bullish gold, buy silver."

Meanwhile, we'll keep a close eye on gold, the U.S. dollar, and silver's own fundamentals.

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