Silver Rebounds to $81, Market Remains Wary of Warsh & Fed Impact
Silver prices (XAG/USD) rebounded in the Asian session on Tuesday, trading around $81 per troy ounce after two significant falls in the previous sessions. This rebound is more like a "catch-up call" after a major sell-off, rather than a sign of a secure trend.
The main pressure has come since Donald Trump nominated Kevin Warsh as his candidate for Federal Reserve Chair. The market views Warsh as being more "tight" and less likely to ease policy—this typically makes assets like silver (which does not yield) less attractive compared to the dollar/yield.
The silver sell-off was also exacerbated by Chinese speculators rushing to reduce their positions. But on the other hand, the market is also eyeing the potential for "buy the dip": if buyers come back in at a discount, silver could provide a cushion.
Previously, silver had soared to a record high (as reported at $121.66 on January 29) due to a combination of geopolitical and economic uncertainty, concerns about currency depreciation, and the issue of central bank independence. However, as tensions eased—including with the US-Iranian communication signals—demand for safe havens also cooled. Ayatollah Ali Khamenei also warned that a US attack could trigger a wider conflict, so geopolitical headlines could still send prices soaring at any time.
From the Fed's perspective, official comments were also cautious: the Federal Reserve Bank of St. Louis, through Alberto Musalem, stated that further cuts were not yet necessary and that the policy level was considered quite neutral, while the Federal Reserve Bank of Atlanta, through Raphael Bostic, emphasized patience and that policy should remain somewhat tight. This combination led to a silver rebound, but the market remained "on the brakes" as the direction of interest rates remained a key factor. (asd)
Source: Newsmaker.id
