Silver Will Soon Face Selling Pressure From the Rebalancing of This Index — Barrons.com

Andrew Bary

The run-up in silver prices could face a near-term test from selling driven by the rebalancing of the Bloomberg Commodity Index.

The rebalancing, set to take place from Jan. 8 to Jan. 14, could lead to selling about $3.8 billion worth of silver via futures contracts, according to a Dec. 11 report from a team of J.P. Morgan analysts led by Gregory Shearer.

J.P. Morgan also predicts selling of about $4.7 billion of gold keyed off the Bloomberg index rebalancing, following the metal's gain during 2025.

The Bloomberg Commodity Index, which has about $109 billion of funds tracking it, is a leading commodity index. It gets new target weights annually and gets rebalanced each January. The J.P. Morgan analysts predicted a much smaller amount of silver sales from the coming rebalancing of the S&P GSCI commodity index.

Silver has more than doubled over the past year to $72 an ounce, while gold is up 60% in the same span to $4,318 per ounce.

"Gold and silver are set for a third consecutive year of rebalance-driven selling. Amidst very sharp further outperformance this year, current weights and prices imply that around 11k lots (3% of total open interest) of COMEX Gold and 13k lots (9% of total open interest) of COMEX Silver are likely to be sold to reach 2026 target weights," the J.P. Morgan team wrote. COMEX is a leading metals exchange owned by CME Group.

In a report on Dec. 12, the analysts said: "Yet a continued sharp outperformance of silver ahead of the Jan '26 roll period would in turn also ramp up required selling through the rebalance (which is already higher in % of [open interest] on [a year-over-year] basis vs 2025)."

"Given lower liquidity overall, there remains a risk that this more outsized silver selling could be more disruptive to silver prices this time around and is something we're keeping an eye on as we approach the roll period on January," the team added.

Silver traded at around $60 an ounce when the J.P. Morgan report was released, and has appreciated further since then.

The Bloomberg commodity index is up about 10% over the past year, Bloomberg data show, and gold has the largest weighting at 20%, with silver second at 9%.

Barron's earlier reported that there are signs that the silver market is in a bubble.

Write to Andrew Bary at andrew.bary@barrons.com

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