(Bloomberg) — Gold and silver steadied at the beginning of the year after their best annual performances since 1979 as traders assessed the reweighting of a benchmark commodity index that starts next week.
Bullion gained as much as 1.9% on Friday before paring most gains during US hours. Silver eased after earlier climbing as much as 4%. While traders have flagged the metals could do well this year on further US interest-rate cuts and dollar weakness, there’s concern that a broad index rebalancing might pressure prices in the near term. Given the metals have rallied, passive tracking funds may sell some contracts to match new weightings.
Most Read from Bloomberg
Silver futures make up 9% of the the Bloomberg Commodities Index, a widely tracked benchmark for a basket of commodities. That compares with a 2026 target weighting of just under 4% — meaning more than $5 billion of holdings will have to be sold in the five-day roll period starting next Thursday. Roughly $6 billion of gold futures are set to be sold.
“We expect a massive 13% of aggregate open interest in Comex silver markets will be sold over the coming two weeks, to result in a dramatic repricing lower,” Daniel Ghali, a senior commodity strategist at TD Securities, wrote in a note Friday. Lower post-holiday liquidity may amplify price moves, he said.
Precious metals posted a ferocious run higher last year, though there was significant volatility in late December as some investors booked profits and trading metrics pointed to overbought conditions. Gold notched a series of records in 2025, aided by central-bank buying, easing Federal Reserve policy and a weaker US dollar. Demand for haven assets, driven by geopolitical tensions and trade frictions, also buoyed prices.
Silver rallied even more than gold during the year, hitting records and blowing through levels that until recently seemed unthinkable to all but the most enthusiastic of market watchers. In addition to the factors that aided gold, silver has also benefited from sustained concerns that the US administration could eventually impose import tariffs on the refined metal.
Among leading banks, there’s support for further gains in gold this year, especially with the Fed expected to deliver additional rate reductions and President Donald Trump reshaping the US central bank’s leadership. Goldman Sachs Group Inc. said last month that its base case was for a rally to $4,900 an ounce, with risks to the upside.