Silver prices (XAG/USD) traded nearly 1% lower at around $79.00 during the European session on Tuesday, as investors exercised caution ahead of the US Senate confirmation hearing for Kevin Warsh, President Donald Trump's nominee for Federal Reserve chair [1]. The market is closely watching Warsh's comments to gauge whether his decisions will align with Washington's economic agenda or focus on maintaining the Fed's independence, especially after President Trump criticized current Fed Chair Jerome Powell for not lowering interest rates aggressively [1].
The nomination of Kevin Warsh as Powell's replacement on January 30 previously triggered a sharp sell-off in silver, with prices falling over 30% after reaching an all-time high of approximately $121.60 the day before. This reaction was attributed to Warsh's historical opposition to Quantitative Easing and his preference for a strong US Dollar during his prior tenure at the Fed under Ben Bernanke [1].
On the technical front, silver remains near the 20-day EMA at $77.04, indicating a sideways trend, with resistance at $81.52 and support at $76.50. A break below support could expose silver to a deeper pullback toward $70.00, while a close above resistance may signal a recovery toward the March 13 high of $85.46 [1].
Gold markets are also experiencing headwinds, with ING strategists noting that higher oil and gas prices are reviving inflation concerns and capping gold's upside in the short term [2]. Disruptions around the Strait of Hormuz are supporting energy prices and reinforcing inflation expectations, which act as a near-term headwind for gold. Although gold has recovered some conflict-driven losses, it remains about 8% below pre-conflict levels after earlier liquidity-driven selling [2].
Both silver and gold markets are expected to remain volatile, with attention focused on the outcome of Warsh's confirmation hearing and any hawkish signals that could further pressure precious metals. Elevated geopolitical tensions and uncertainty around the Middle East are expected to underpin haven demand, but shifting expectations around central bank policy and real yields will continue to drive price action [2].
CONCLUSION
Silver and gold prices are under pressure ahead of Kevin Warsh's Federal Reserve confirmation hearing, with inflation concerns and Fed policy uncertainty weighing on both markets. Investors are bracing for volatility, as any hawkish signals from Warsh could further dampen precious metals, while ongoing geopolitical risks may provide some support. The market remains highly sensitive to central bank signals and inflation expectations.