Is Silvers Slide Just Calm Before a Big Index Shake-Up?
Source: Kapitales Research
Highlights:
Silver fell for a second day, dropping about 2.3% as traders positioned ahead of large-scale selling linked to the annual rebalancing of commodity indexes.
Passive funds are expected to sell billions of dollars’ worth of silver futures to meet new index weightings, adding technical pressure to prices.
Gold proved more resilient, steadying after earlier losses as investors viewed the selling as flow-driven rather than a shift in fundamentals.
Precious Metals Feel Selling Pressure
Silver prices fell for a second consecutive day as traders positioned ahead of the annual rebalancing of major commodity indexes, a technical but powerful market event that often triggers heavy futures selling. At the time of writing, spot silver was down about 2.3%, while gold steadied, trimming earlier drops as investors balanced positioning with broader market flows. The expected rebalancing — which affects benchmarks such as the Bloomberg Commodity Index — means that passive funds tracking these indexes must adjust their holdings, often selling futures to align with new weightings. Given the strong rallies silver and gold enjoyed in 2025, this year’s rebalance carries outsized significance for precious metals.
What’s Driving Silver Lower?
Ahead of the rebalancing window, traders have been trimming exposure to silver futures, contributing to the recent price declines. The metal’s recent strength has paradoxically increased its vulnerability: the larger its weight in commodity indexes, the more mechanical selling is required when target allocations shift. Analysts estimate that billions of dollars of futures contracts could be sold as part of this process, with estimates suggesting about $6.8 billion worth of silver futures may be liquidated — equivalent to a significant portion of open interest on COMEX. Silver-backed exchange-traded funds also felt the pressure, with notable outflows seen in recent sessions as volatility spiked and funds adjusted their holdings. This technical selling has added to near-term downward momentum.
Gold Holds Ground More Firmly
Gold has been less affected than silver, paring losses and even rising modestly at times as investors treat some of the selling as position-squaring rather than a fundamental shift in demand. The flow-driven selling associated with index rebalancing tends to impact silver more than gold due to their differing weightings and market structures.
What Traders Are Watching Next
Market participants will be closely watching the rebalancing period — expected to run through mid-January — for signs that forced selling is complete and that prices may stabilise. Historically, once index adjustments are finished, metals often find support as normal trading resumes and longer-term fundamentals — such as industrial demand for silver and safe-haven interest in gold — reassert themselves.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au
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Is Silvers Slide Just Calm Before a Big Index Shake-Up?
Highlights:
Precious Metals Feel Selling Pressure
Silver prices fell for a second consecutive day as traders positioned ahead of the annual rebalancing of major commodity indexes, a technical but powerful market event that often triggers heavy futures selling. At the time of writing, spot silver was down about 2.3%, while gold steadied, trimming earlier drops as investors balanced positioning with broader market flows. The expected rebalancing — which affects benchmarks such as the Bloomberg Commodity Index — means that passive funds tracking these indexes must adjust their holdings, often selling futures to align with new weightings. Given the strong rallies silver and gold enjoyed in 2025, this year’s rebalance carries outsized significance for precious metals.
What’s Driving Silver Lower?
Ahead of the rebalancing window, traders have been trimming exposure to silver futures, contributing to the recent price declines. The metal’s recent strength has paradoxically increased its vulnerability: the larger its weight in commodity indexes, the more mechanical selling is required when target allocations shift. Analysts estimate that billions of dollars of futures contracts could be sold as part of this process, with estimates suggesting about $6.8 billion worth of silver futures may be liquidated — equivalent to a significant portion of open interest on COMEX. Silver-backed exchange-traded funds also felt the pressure, with notable outflows seen in recent sessions as volatility spiked and funds adjusted their holdings. This technical selling has added to near-term downward momentum.
Gold Holds Ground More Firmly
Gold has been less affected than silver, paring losses and even rising modestly at times as investors treat some of the selling as position-squaring rather than a fundamental shift in demand. The flow-driven selling associated with index rebalancing tends to impact silver more than gold due to their differing weightings and market structures.
What Traders Are Watching Next
Market participants will be closely watching the rebalancing period — expected to run through mid-January — for signs that forced selling is complete and that prices may stabilise. Historically, once index adjustments are finished, metals often find support as normal trading resumes and longer-term fundamentals — such as industrial demand for silver and safe-haven interest in gold — reassert themselves.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au