Gold and silver prices could face renewed pressure later this month as large institutional investors rebalance commodity indices, highlighting how technical flows can rival fundamentals in driving short-term price moves, according to Deutsche Bank.
The bank said the annual rebalancing of the Bloomberg Commodity Index, scheduled to run from January 9 to 15, is likely to prompt selling in precious metals while redirecting capital towards parts of the energy complex, particularly crude oil.
The index is widely tracked by passive investment funds, with assets of nearly $109bn, meaning even relatively small changes in weightings can generate sizeable market flows.
Gold is set to see one of the steepest reductions, with its index weighting falling from 20.4% to 14.9%, largely because index rules cap any single commodity at 15% to maintain diversification. Silver faces a similar adjustment, with its weighting due to drop from 9.6% to 3.9%.
Deutsche Bank estimates that index-linked selling could total around 2.4 million troy ounces of gold, which, based on historical sensitivities, could translate into a 2.5–3.0% drag on prices during the rebalancing window.
However, the bank cautioned that the relationship between index flows and prices is far from mechanical. In recent years, large weighting changes have sometimes coincided with price moves in the same direction, but not always. In 2025, for example, gold prices rose despite a reduction in its index weighting, underscoring the influence of broader macro forces such as interest rates, currencies and geopolitics.
Energy markets, by contrast, are expected to benefit this year. Weightings for both Brent and WTI crude oil are set to increase, alongside gains for natural gas and gas oil. When adjusted for market liquidity, Deutsche Bank said rebalancing demand is likely to be most pronounced for WTI crude, making it a potential short-term beneficiary.
Cocoa stands out as a special case. The commodity is being reintroduced into the index after meeting liquidity and production thresholds, implying buying equivalent to a large share of open interest and daily trading volumes. That raises the risk of sharp price swings in what is already a volatile market.
For investors, Deutsche Bank said the issue is one of timing rather than long-term direction. Index rebalancing does not alter the structural outlook for commodities, but it can create short-lived distortions. January may therefore prove a period of vulnerability for precious metals, while energy markets could enjoy a temporary technical tailwind before attention shifts back to fundamentals.
