Silver in elegant old US city (7)
I believe the answer is:
chicago
'us city' is the definition.
(Chicago is a US city)
'silver in elegant old' is the wordplay.
'silver' becomes 'Ag' (Ag is the chemical symbol for silver).
'in' is an insertion indicator.
'elegant' becomes 'chic' (chic means fashionable or elegant).
'old' becomes 'o' (abbreviation).
'chic'+'o'='chico'
'ag' placed inside 'chico' is 'CHICAGO'.
(Other definitions for chicago that I've seen before include "Al Capone's city" , "US city, original home of the skyscraper" , "American city; musical" , "A windy place" , "A Windy City in Illinois" .)