FX.co ★ Silver Rises After Dramatic Two-Day Slump

Silver saw a recovery to over $83 per ounce on Tuesday, regaining some ground following a significant two-day decline that wiped out nearly 40% of its value from its recent record highs. Throughout January, precious metals reached unprecedented levels, driven by escalating geopolitical and economic uncertainties, concerns over currency debasement, and apprehensions regarding the Federal Reserve's independence—all of which fueled strong demand for safe-haven assets. A structural supply shortage in the silver market, coupled with increased investment, particularly from Chinese speculators, further propelled the rally. However, the trend reversed on January 30, as silver suffered a historic 26% drop following US President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair, who is perceived by markets as having a hawkish stance. The decline was intensified by the swift unwinding of speculative positions by Chinese investors, though these same investors may support prices if they engage in dip-buying once again.