If you're one of the thousands of people who bought silver bars from Costco over the past year, you might want to sit down for this.
Silver prices just dropped nearly 15% in overnight trading, falling from around $32 per ounce to the mid-$27 range. That's the kind of move that makes your stomach drop—especially if you bought at the peak.
What Happened?
The short answer: nobody is entirely sure. And that should worry you.
The Reddit posts are full of theories—new federal reporting rules, foreign investors dumping positions, a shift away from industrial demand. All of those could be factors. But the truth is, precious metals markets are volatile, and sometimes they move fast without a clear headline to explain it.
What we do know is this: silver had a massive run-up over the past two years. It hit $35 per ounce in late 2025, driven by a combination of industrial demand (solar panels, electronics), inflation fears, and good old-fashioned speculation.
A lot of retail investors—the Costco crowd—bought in near the top because they heard it was a "safe haven" or a hedge against inflation. Some were buying physical silver bars. Others were buying ETFs or mining stocks. Either way, they were betting on prices going higher.
Now they're underwater.
The Costco Phenomenon
For those who missed it, Costco started selling one-ounce silver bars in their stores and online in 2024. They sold out constantly. People were buying them by the case.
Why? Because it felt tangible. You could hold it. It was shiny. It felt like real wealth in a way that a stock certificate or a 401(k) statement doesn't.
But here's the problem: silver is not a safe investment. It's a commodity. It goes up and down based on industrial demand, currency fluctuations, and investor sentiment. And when sentiment shifts—like it just did—prices can drop fast.
If you bought silver at $32 and it's now at $27, you're down about 15%. If you bought at $35, you're down more than 20%. That's not a hedge. That's a loss.
Can Silver Come Back?
Maybe. Eventually. But here's what you need to understand about commodities: they don't have earnings. They don't grow. They don't pay dividends. They just sit there, waiting for someone else to pay more than you did.
Silver hit $50 per ounce back in 1980. Then it crashed and didn't get back to that level for 31 years. Some people who bought silver in 1980 never made their money back in real, inflation-adjusted terms.
Could silver go back to $35? Sure. Could it go to $50? Maybe, if industrial demand surges or if inflation spikes again. Could it go to $20? Also yes. Especially if the economy slows and industrial demand drops.
The point is: you're speculating, not investing. And speculation is risky.
What About Industrial Demand?
This is the bull case for silver. Unlike gold, which is mostly jewelry and investment, silver has real industrial uses. It's in solar panels, electric vehicles, electronics, and medical equipment.
As the world transitions to renewable energy, demand for silver should increase. That's the theory, anyway.
But here's the counter-argument: industrial demand is cyclical. When the economy slows, demand for electronics and solar panels drops. Prices follow. And right now, with interest rates high and global growth uncertain, industrial demand is softening.
So while the long-term case for silver might be solid, the short-term case is shaky. And if you need your money in the next few years, you might be stuck waiting for a recovery.
Should You Buy the Dip?
I'm going to give you the answer you don't want to hear: it depends.
If you believe in the long-term case for silver—industrial demand growth, inflation protection, diversification—then yes, this could be a buying opportunity. Prices are lower. If you're adding to a position, now might be a decent time.
But if you're thinking about buying silver because it's down and you hope it bounces back quickly, you're gambling. There's no guarantee it recovers in the next year. Or the next five years.
And if you're holding physical silver—those Costco bars—you need to think about liquidity. It's easy to buy a silver bar. It's harder to sell one. Most coin shops will pay you less than spot price. Online buyers charge fees. And if you need cash quickly, you might have to take a loss just to unload it.
The Bottom Line
Silver is not a safe investment. It's not a guaranteed inflation hedge. It's a volatile commodity that can drop 15% overnight for reasons nobody fully understands.
If you bought silver at the peak, you're probably feeling pretty bad right now. But don't panic. If your thesis was long-term, nothing has changed. Industrial demand is still growing. Inflation is still a concern. Silver still has uses.
But if you bought silver because everyone else was buying it, or because it felt like easy money, this is a painful lesson in why speculation is different from investing.
The people who make money in commodities are the ones who buy low and sell high. Not the ones who buy high and hope for higher. If you're in the second group, you might be waiting a while.
And if you're thinking about buying those Costco bars now that they're cheaper: ask yourself why you want them. If it's for diversification and you can afford to hold for 10+ years, fine. If it's because you think they'll bounce back next month, you're playing a dangerous game.
Commodities don't care about your timeline. They move when they move. And sometimes, they don't move at all.
