FX.co ★ Silver Extends Gains as Volatility Eases

On Wednesday, the price of silver surged past $86 per ounce, marking a second consecutive session of gains. This uptick follows a period of reduced volatility in the metals market after a dramatic selloff that slashed silver's value by up to 40% in just two days. The wave of forced liquidations appears to have diminished, while opportunistic buyers have moved in to seize the opportunity presented by lower prices. Heightened geopolitical tensions have also bolstered demand for safe-haven assets. This follows an incident where the US Navy shot down an Iranian drone in the Arabian Sea, as new nuclear negotiations are set to commence on Friday. Additionally, a persistent structural supply deficit and consistent industrial demand continue to support silver prices. The rally in silver and other metals that began in January was driven by geopolitical and economic uncertainties, fears of currency debasement, and concerns regarding the Federal Reserve's autonomy. Speculative buying, notably by Chinese traders, intensified the rally, eventually paving the way for a sharp reversal as market sentiment shifted.