Silver Hits a 7-Month Low. Physical Demand Just Hit a Near-Record High.

Silver was trading around $57 per ounce on Friday, June 27 — a seven-month low and nearly 53% below the all-time high of $121.64 reached on January 29. But while futures markets are selling off hard, the physical market is telling a very different story.

Why Paper Silver Is Getting Hit

Fed Chair Kevin Warsh set a hawkish tone at his first FOMC meeting, reaffirming the Fed’s commitment to bringing inflation under control. Nine of eighteen participants now project at least one hike before year-end, and the market has repriced accordingly — lifting Treasury yields and the dollar with it.

Higher rate expectations and a stronger dollar create headwinds for precious metals in two ways: higher real yields make Treasury bonds more attractive than non-yielding metals, and a stronger dollar makes silver more expensive for buyers outside the US. Adding to the pressure, a ceasefire between the US and Iran earlier this month reduced some of the geopolitical fear that had been supporting prices since the start of the year.

The result is a fast, painful decline that has caught a lot of attention — especially for anyone who watched silver climb to $121 just six months ago.

What Physical Demand Is Actually Saying

Here’s where it gets interesting for stackers: while paper prices fall, demand for physical silver and gold bars and coins remains exceptionally strong.

The World Gold Council reported that global gold bar-and-coin demand hit its second-highest quarter on record in Q1 2026, with central banks adding another 244 tonnes on top. Both the US and Europe saw strong growth in physical buying.

Silver faces the same dynamic. The Silver Institute has physical investment demand rising about 18% this year, to its highest level since 2022, even as the market runs a sixth straight annual deficit — 46.3 million ounces, wider than 2025’s 40.3 million. The disconnect between the paper price and physical demand isn’t unusual, but the gap this week has rarely been this visible.

What Stackers Are Actually Dealing With

If you bought silver in January near the highs, the past few months have been uncomfortable. That’s the honest answer. Paper losses on physical silver are real, even if you have no intention of selling.

But for someone on a regular buying schedule — picking up a few ounces each month regardless of price — $57 is simply a better entry point than $121. You are getting more than twice the silver per dollar compared to January. The fundamentals that made you want to own silver in the first place — supply deficits, central bank accumulation of gold, currency uncertainty, inflation risk — have not materially changed.

The paper market and the physical market move together over the long run. Short-term, they can diverge sharply, especially when rate expectations shift fast.

The Bottom Line

Silver’s pullback from its January peak is steep, and the hawkish Fed narrative could push prices lower before they stabilize. But a lower price on something you planned to buy anyway is an advantage, not a problem. If your strategy is to stack consistently each month, this week’s selloff means your next purchase buys more metal than it would have six months ago. Stay the course, keep your buying schedule, and let dollar-cost averaging do what it’s designed to do.