The silver market's 13% holdings face liquidation, and precious metals are facing a reassessment.

In 2026, the precious metals market presents an interesting contradiction: gold and silver prices continue their strong rally from 2025, maintaining the best annual performance since 1979, yet analysts are warning of a potential risk that could alter the short-term trend. Daniel Ghali, Senior Commodity Strategist at TD Securities, predicts that within the next two weeks, up to 13% of the total open interest in the Comex silver market could be sold off, potentially leading to a significant revaluation and downward movement in prices.

Open Interest Pressure in the Silver Market

The specific risk of 13% open interest sell-off

According to the latest news, the 13% open interest sell-off in the Comex silver market mainly stems from index rebalancing. This is not a shift in market sentiment but a technical factor: when index funds perform periodic adjustments, they automatically sell positions with excessive weight. In the context of already significantly rising silver prices, this mechanical selling can create noticeable selling pressure.

Daniel Ghali also added that lower liquidity after the holiday could amplify this price volatility. This means that during periods when market participants are reduced, the impact of selling could be further magnified, potentially causing prices to fall more than expected.

Short-term pressure versus long-term outlook

Overall Context of the Precious Metals Market

Tim Waterer, Chief Market Analyst at KCM Trade, holds a more optimistic view on precious metals. He states that the trend in precious metals in 2026 will be roughly the same as in 2025, maintaining upward momentum. The end-of-year liquidation pressure has eased, and fundamentals are once again in focus, with gold set to start 2026 on an upward note.

This optimistic outlook is supported by major banks. Goldman Sachs stated last month that its baseline forecast is for gold to rise to $4,900 per ounce, with risks skewed to the upside. This forecast is based on two key factors:

• The Federal Reserve is expected to further cut interest rates
• U.S. President Trump is reshaping the Federal Reserve leadership, which could influence future monetary policy directions

Key Variables Facing the Market

Recent Focus Areas

• Index rebalancing timing: The next two weeks are a critical window, and investors need to closely monitor changes in open interest
• Liquidity recovery: When liquidity returns after the holidays will determine the extent of price volatility
• Macroeconomic data: Fed policy signals and economic data will influence the fundamental support for precious metals

Personal Viewpoint

From the current situation, this 13% open interest sell-off appears more like a “technical adjustment” rather than a trend reversal. In the short term, silver indeed faces pressure, but this pressure is predictable and limited in time. Once index rebalancing is complete and liquidity recovers, the long-term bullish trend for precious metals may once again dominate the market.

Summary

The risk of a 13% open interest sell-off in the silver market is real and will likely exert noticeable pressure on prices over the next two weeks. However, from a broader perspective, this is merely a technical correction within the long-term upward trend of precious metals. Expectations of Fed rate cuts, geopolitical uncertainties, and other factors continue to support the fundamentals of precious metals. The key is to distinguish between short-term technical pressures and long-term fundamental support, and not to overlook the long-term value of precious metals because of the short-term impact of index rebalancing.