Physical Silver Market Logjam: How the 2026 Price Surge Overwhelmed Refiners and Retailers

The journey of physical silver through the global marketplace has long been characterized by distinct shifts in supply, industrial demand, and investor sentiment. Decades ago, after the U.S. Mint ceased striking 90 percent silver dimes, quarters, and half dollars for regular circulation, savvy collectors and investors immediately recognized their intrinsic value and began hoarding them. So massive was the historical volume of these constitutional silver coins that, well into the 1980s, a remarkably large percentage of all bullion-priced physical silver transactions occurring outside of formal commodity futures markets involved these very 90 percent coins.

As time progressed, private mints and fabricators began striking an increasing number of silver bars and rounds to fill the emerging supply void in the bullion market. By the 1980s, a growing number of sovereign nations also entered the space, issuing .999 fine silver one-troy-ounce coins designed to be traded directly at bullion prices. For the most part, these diverse forms of physical silver coexisted harmoniously within a functioning market ecosystem.

However, unusual market pressures have periodically disrupted this delicate balance. When the silver spot price fell sharply during the height of the Great Recession in late 2008, commercial fabricators and mints found themselves temporarily unable to produce enough silver products to satisfy a sudden surge in retail investor demand. U.S. 90 percent silver coins—which had been out of regular production for more than four decades but remained readily available across the secondary market—suddenly experienced a dramatic spike in retail premiums, climbing to more than 30 percent above the actual melt value of the silver contained within the coins. In more normal market conditions over recent decades, these traditional U.S. 90 percent silver coins had typically traded at premiums fairly close to parity with standard commercial bars and rounds.

Yet, the trajectory of silver prices over the subsequent three years was anything but normal. The market experienced an astonishing upward surge, with the price of silver jumping an incredible 460.1 percent from the COMEX close of $20.84 on October 5, 2023, to settle at a dramatic $116.73 per ounce by January 28, 2026.

When the price of silver climbed so dramatically and reached its late January peak, an extraordinary wave of opportunistic sellers flooded the secondary market. While major industrial fabricators typically acquire massive 1,000-ounce bars of pure silver for manufacturing purposes, the overwhelming bulk of the liquidated silver brought in by everyday retail sellers fell into different categories. This included smaller pure bars and coins, items made of sterling silver with a 92.5 percent purity level, objects of even lesser purity content, and a wide variety of household flatware, holloware, and jewelry predominantly composed of sterling silver.

The sheer volume of silver being liquidated in early 2026 overwhelmed the refining sector, leaving commercial refiners completely unable to handle the massive deluge in a normal, timely fashion. As a severe operational backlog quickly developed, many refiners temporarily imposed strict limitations on the types of silver they were willing to accept, specifying that they would only take in .999 fine coins and bars.

This processing bottleneck caused refiner payments to face severe delays of four to six weeks. That downstream delay forced bullion wholesalers to postpone their payments to regional coin and precious metals dealers, which ultimately pressured local dealers to take drastic defensive measures. Many retail operations were forced to either completely stop purchasing physical silver from the public, restrict their intake exclusively to high-purity .999 items, or establish strict maximum transaction limits on what they were willing to buy from everyday sellers.

One immediate consequence of this severe market logjam was that physical silver prices were discounted—sometimes quite steeply—below the official COMEX spot price, echoing similar logistical dislocations experienced from late 1979 into January 1980. During this period of market stress, virtually the only form of physical silver in America that reliably traded at or near the official spot price was the large 1,000-ounce pure bars safely secured inside COMEX bonded warehouses.

As a result, retail investors and numismatic collectors grew deeply frustrated. They found themselves unable to readily liquidate their physical holdings near the market peak in January anywhere close to the COMEX spot price, and in some unfortunate instances, they were unable to find buyers at all.

This market logjam serves as a primary reason why silver’s price subsequently dropped by a greater percentage from its January peak than either gold or platinum. A continuing negative aftereffect of the crisis has been that subsequent investment demand for silver has failed to ramp up as strongly at recent price levels in the $50s and $60s as it historically did after previous major market pullbacks. Investors have shown a distinct reluctance to commit fresh capital to silver at lower prices, weighed down by lingering concerns that they might encounter similar difficulties in securing a fair market price—or finding a buyer at all—should prices skyrocket again in the future.

One tangible consequence of this diminished enthusiasm among retail buyers is that most coin and precious metals dealers are still selling U.S. 90 percent silver coins to retail customers at a noticeable discount relative to the current silver spot price. The liquidity constraints experienced by dealers in early 2026 have permanently shifted a larger share of silver buyers toward products featuring .999 fine purity.

At the same time, foundational industrial demand for silver continues its relentless climb. Silver remains a critical component in the manufacturing of solar panels, cellular phones, electric vehicle batteries, military equipment, advanced medical applications, and a vast array of other modern technologies. Over the long term, this robust industrial demand is expected to steadily displace the more volatile and cooling retail investment demand.

Because industrial consumption tends to be far more consistent and less erratic than speculative investment buying, market experts anticipate that in most future scenarios, U.S. 90 percent silver coins—alongside other world coinage of less than .999 fineness—will trade with liquidity comparable to pure silver products and command prices closely aligned with them. The only major exception where U.S. 90 percent silver coins might face steep discounts compared to pure bars and coins would likely be during extraordinarily rapid, short-term market spikes. Consequently, savvy buyers who are able to purchase U.S. 90 percent silver coins today at a lower cost per ounce of actual silver content may find it wise to allocate a high percentage—or even all—of their physical bullion acquisitions into these budget-priced traditional coins.

Another important market consideration involves the composition of these mixed-purity metals. The most common alloying element found in sterling silver and various other forms of non-pure silver is copper. With copper prices also reaching historic, all-time record highs, refiners who purchase non-pure silver items—such as U.S. 90 percent silver coins—and pay sellers strictly based on the silver content alone possess an opportunity to secure enhanced profit margins by successfully recovering and selling the residual copper content alongside their primary distribution of 1,000-ounce pure silver bars.

Last column’s numismatic trivia question

Last time the question was raised: How is the U.S. Dollar Index calculated?

The U.S. Dollar Index was originally established in 1973 with a baseline value of 100. Today, it is calculated using a geometrically weighted average against a basket of six foreign currencies: the euro, which commands the largest share at 57.6 percent; the Japanese yen at 13.6 percent; the British pound at 11.9 percent; the Canadian dollar at 9.1 percent; the Swedish krona at 4.2 percent; and the Swiss franc at 3.6 percent. Notably, the euro was introduced into the index in January 1999, replacing the German mark and the French franc. In contemporary financial policy discussions, there is ongoing advocacy suggesting the index should be expanded to incorporate major U.S. trading partners that currently wield significantly greater trade volume than Sweden and Switzerland, specifically the Chinese yuan, the Mexican peso, the South Korean won, and the Brazilian real.

This column’s trivia question

Turning to this week’s inquiry: What are the specific physical components that make up the "paper" used in U.S. currency? Readers are invited to check back next week for the official answer.

Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, the 2017 Exemplary Service Award, the 2012 Harry Forman National Dealer of the Year Award, and the 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild, Professional Numismatists Guild, National Coin & Bullion Association, and the Michigan State Numismatic Society. He serves as the communications officer for Liberty Coin Service in Lansing, Michigan, and authors "Liberty’s Outlook," a quarterly newsletter covering rare coins and precious metals. He also volunteers with the National Coin & Bullion Association as its Industry Issues Advisor.