- Silver prices climbed to around $87.60 during Wednesday’s Asian trading session.
- However, shifting expectations surrounding the next Federal Reserve chair could limit further upside in the metal.
- Demand for safe-haven assets strengthened after reports that the United States shot down an Iranian drone that was approaching an aircraft carrier.
Silver prices (XAG/USD) climbed to around $87.60 during Asian trading on Wednesday, rebounding after a historic correction last week as dip-buying activity returned to the market.
On Friday, U.S. President Donald Trump nominated Kevin Warsh to replace Jerome Powell as the next Chair of the Federal Reserve, with Warsh expected to assume the role when Powell’s term ends in May. Expectations that Trump’s nominee may favor keeping interest rates elevated to combat inflation have supported the U.S. dollar, potentially weighing on dollar-denominated commodities such as silver.
Precious metals have also faced pressure from margin hikes by the CME Group. Over the weekend, the exchange raised margin requirements for gold and silver, forcing many leveraged traders to liquidate positions to meet higher costs.
On the other hand, safe-haven demand has been underpinned by rising geopolitical risks and economic uncertainty. Reuters reported on Tuesday that the U.S. military shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea.
Separately, Iran requested that this week’s negotiations with the United States be held in Oman rather than Turkey and limited to bilateral discussions focused solely on nuclear issues. President Trump warned that with U.S. warships moving toward Iran, “bad things” could occur if an agreement is not reached.
Sources: Lallalit Srijandorn
THE ETERNAL SOVEREIGN 
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