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 ,s as a result.
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.
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