# Silver's Wild Ride in 2016: Why $20 Couldn't Hold

Silver had quite the rollercoaster year. Starting 2016 below $14/oz, it climbed to above $20 mid-year—a psychological level traders were eyeing hard. By year-end though? Back down to $15.88. That's roughly 15% gains on paper, but nowhere near the 50% peak-to-trough swing that happened during the year.

**What lit the fire?**

Two things mainly: First, chaos in early 2016 (stock market selloff, oil tanking, China's bear market) sent money into safe havens. Precious metals rallied as investors hedged. Second, the Fed stayed dovish—rates didn't budge until December, making it cheaper to hold metals long-term. Brexit added fuel too, sparking currency panic and safe-haven demand.

Silver smashed through $20 in mid-2016. Some analysts were calling $25+ by year-end.

**Then reality hit.**

U.S. economy actually looked solid. Stocks screamed higher (Dow hit ~20K). That flipped the script: if the economy's doing fine, why hold defensive metals? Investors rotated into equities. The Trump election surprised markets, but confidence snapped back fast—more stock buying, less silver buying.

Profit-taking kicked in too. When prices peak, scrap supplies increase and weak industrial demand meets seller enthusiasm. Silver collapsed back below $16.

**2017 outlook?**

Technically messy, with risk from rising rates pushing capital elsewhere. But wild card: geopolitical shocks or macro surprises could reignite safe-haven flows back to $20.