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A wave of bullion selling worth more than $10bn is providing the first “big test” of the market in 2026, as last year’s stratospheric run-up in gold and silver prices comes under pressure.
Funds that track commodity indices are rebalancing their holdings and are expected to sell about $6.1bn of silver and $5.6bn of gold during the annual rebalancing window running this year from January 8 to 15, according to calculations from JPMorgan.
“It is the industry’s first big test of how sustainable the December moves are, given we are starting 2026 at such a high base,” said Nicky Shiels, analyst at MKS Pamp.
Benchmark commodity indices such as the Bloomberg Commodity index have to rebalance their weightings once a year to maintain target allocation levels. Funds that track the indices have to buy or sell holdings as a result.
In some years, the market impact is muted but, due to recent big moves in some commodity prices, this year’s rebalancing is expected to have a bigger effect.
This may put pressure on bullion prices but could also provide an opportunity for keen investors to buy the dip — which happened last year, analysts point out. During the 2025 rebalancing window, enforced selling was met with even greater buying, sending prices up.
Gold prices have fallen 0.6 per cent since Tuesday’s close, while silver prices are down more than 4 per cent in the same period.
The yellow metal soared more than 60 per cent in 2025, with silver rising more than 160 per cent.
Gregory Shearer, an analyst at JPMorgan, said silver would see the biggest sales of any commodity during the rebalancing. He estimates net selling of silver equivalent to about 10 per cent of the value of all the open derivatives contracts on trading venue Comex.
Traders are also watching cocoa, which has been re-included in the BCOM. Funds will have to buy a quantity of cocoa equivalent to about 30 per cent of open interest on the Ice exchange in London, according to Kona Haque, head of research at commodity trader ED&F Man.
“This is huge,” she said, adding that the changes helped explain cocoa’s sharp rally in November, when the index announced its inclusion.
Haque said some speculative funds may already have moved ahead of the rebalancing but added that “even then, there should be a decent bullish impact on cocoa prices just on the pure index funds buying”.
“Cocoa people have talked of little else for three months,” said Jonathan Parkman of Marex, adding that there were concerns the rebalancing could prompt short covering of a large speculative position in London.
Cocoa prices fell nearly 50 per cent in 2025, after a record-breaking rally in 2023 and 2024 driven by supply shortages in West Africa, which grows more than two-thirds of the world’s beans.