I'm replacing a power wire on a model train transformer(Lionel type 1033.) The power wires' insulation has cracked with age and I almost burnt the house down plugging it in, so I'm replacing it.

I have on hand 16 gauge speaker wire that is copper. The original is 18 gauge, and it's colored silver, but not sure exactly what metal it is. I assume it's some copper alloy that is just colored silver/grey.

I'm just not sure if I need to go and buy a cable that is specifically engineered for power(typical 125v/30 amp household breaker I think 12 gauge wire maybe 14), as the chemical composition might be a factor, or if speaker cable is acceptable?

 

Do not use speaker wire for 115VAC power.

If you mean the AC power cord, just buy a good extension cord of the needed length and gauge, cut off the socket end, cut back the cord insulation and use the load, neutral (and ground wires if there is a connection) as needed.

 

From dozens of devices going to the dumpster daily, cut off the power cord to salvage and replace your damaged one. Comes with a standard plug and will supply your need of 90 Watts.
Coffee makers to fans to laptop bricks to televisions to VCRs to hair dryers to no shortage of all kinds of donors...

 

I'm just not sure if I need to go and buy a cable that is specifically engineered for power(typical 125v/30 amp household breaker I think 12 gauge wire maybe 14), as the chemical composition might be a factor, or if speaker cable is acceptable?

Only if the insulation was rated for at least 125VAC (with some margin).

18 gauge isn't rated for 30A, neither are most 125VAC circuits. They should be 15 or 20A in residential wiring. 14 gauge Romex is rated for 15A/600V.

 

You will find, at least I have noticed, that the majority of good quality MAINS VOLTAGE power cords, in the USE, at least, have insulation rated for at least 300 volts AC. The reason is that what is easily possible is for two power cords to plugged into outlets fed from the opposite sides of the 240 volts feed common in the US, and thus have an average voltage of 240 volts between the two conductors. Besides that, the PEAK voltage of the "120 volt" AC mains is quite a bit more than the nominal 120 volts. That is why the non-loaded mains powered voltage voltage doubler iis around 320 volts.

OF COURSE, all of this is based on the guess that it is indeed the mains "Power" cord that needs replacing. My comments are based on that guess as well.
The silver color on the surface of the wire strands is usually a tin plating intended to reduce corrosion and also make the cord flexing a bit less wearing. The tin serves as a bit of a bearing surface.

 

Three things I'm seeing here:

I'm replacing a power wire on a model train transformer(Lionel type 1033.) The power wires' insulation has cracked with age and I almost burnt the house down plugging it in, so I'm replacing it.

We're talking about the power cord, which has nothing to do with the circuit breaker rating or what gauge wiring is used in the house electrical system.

I have on hand 16 gauge speaker wire that is copper. The original is 18 gauge, and it's colored silver, but not sure exactly what metal it is.

16 gauge is heavier than 18 gauge. So simply considering amperage, 16 is better than 18. HOWEVER speaker wire is generally not rated for 120VAC. I've seen some high power amplifiers using higher voltages, but you also see being used wire gauge AND INSULATION rated to handle 150% of the expected normal loading from such equipment. Your train transformer is no where the same caliber of a high powered amplifier. So, no, you wouldn't want to use speaker wire. Even if it's heavier gauge. It's not the wire, it's the insulation. More so it's the insulation breakdown voltage rating, which most consumers never become aware of such.

I'm just not sure if I need to go and buy a cable that is specifically engineered for power(typical 125v/30 amp household breaker I think 12 gauge wire maybe 14), as the chemical composition might be a factor, or if speaker cable is acceptable?

For clarity: 12 awg (gauge) wire is rated for 20 amp service. 14 awg is rated for 15 amps. TV's Stereo's, computers, etc. don't draw nearly 15 amps. The wife's hair dryer and curling iron may draw 1800 watts (15A at 120VAC). The reason why that doesn't trip a 15A breaker is because breakers are not rated with the insatiable desire to trip when you come close to their rating. They will endure a little over current but not much. Depending on the type of breaker they will each respond a little differently.

Your train transformer draws 90 watts (0.75 amps - or 750 milli-amps). That kind of wattage (voltage times amps) is EASILY handled by lamp cord (18 gauge). And lamp cord is rated for 120VAC. Back when your TXFMR was built they used heavier insulation because of period available materials. Today there are better materials for protecting wiring. I have some old old old power supplies that came with HUMUNGOUS power cords. And they were rated for use on 15 amp services. Those power supplies also have a 15 amp breaker built in. I've replaced many of the old cracked and failing power cables with 14 gauge extension cords cut to length. A little on the heavy side but for what they are and how they're protected, 14 gauge is called for. But for your little 90 watt transformer, lamp cord will do just fine.