By Yihui Xie

(Bloomberg) -- Gold and silver advanced as trading in 2026 kicked off, building on their best annual performances since 1979.

Bullion rose near $4,375 an ounce, as silver gained more than 2%. While traders have flagged the metals could do well in 2026 on further US interest-rate cuts and dollar weakness, there’s near-term concern that broad index re-balancing may pressure prices. Given the metals have rallied, passive tracking funds may sell some contracts to match new weightings as they are confirmed.

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“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. Lower post-holiday liquidity may amplify price moves, he added.

Precious metals posted a ferocious run higher last year, although 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 US-led trade frictions was also supportive.

Silver rallied even harder that gold in 2025, hitting records and blowing through levels that until recently had seemed unthinkable to all but the most enthusiastic of market watchers. In addition to the factors that aided gold, silver has also been a beneficiary of sustained concerns that the US administration could eventually impose import tariffs on the refined metal.

Among leading banks, there’s support for further rises 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.

Gold gained 1.3% to $4,375.15 an ounce at 12:01 p.m. in Singapore. The Bloomberg Dollar Spot Index was 0.1% lower. Silver advanced 2.5% to $73.4459. Palladium and platinum also surged.

Trading may be thin on Friday given that several major markets, including Japan and China, remain on holiday.

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