More Stories

Informist, Friday, Jan. 9, 2026

 

MUMBAI – Global commodity markets are looking forward with anxiety to the rebalancing of the Bloomberg Commodity Index, an annual exercise that began Thursday and will close on Jan. 15. The exercise is aimed at adjusting weights of different commodities in the Bloomberg Commodity Index.

 

The Bloomberg Commodity Index, a widely followed benchmark by the market, tracks the performance of 23 physical commodities across sectors such as energy, metals, and agriculture. It adjusts its weightings every year to maintain diversification, Kedia Advisory said in a note. This rebalancing typically starts in January each year and ensures that no single commodity or group of commodities becomes too dominant in the index, it said. 

 

The rebalancing is designed to maintain the index's diversification, enforces a 15?p per commodity and ensures that no single commodity group exceeds 33% of the index's weight.

 

This process has short-term market implications as passive funds release their portfolios, influence commodity prices, trading volumes, and market behaviour, the note said. The process ensures that the index reflects current market conditions and commodity fundamentals. It creates both risks and opportunities for traders and investors, particularly due to volatility in affected commodities and potential shifts in market sentiment. 

 

According to Kedia Advisory, gold and silver, which posted massive gains in the previous year, 65% and 148%, respectively, are undergoing the most significant adjustments. The yellow metal's weight in the index will drop to 14.9% from 20.4% and silver's weight is likely to fall drastically to 1.45-4% from 9.6%. "This will lead an estimated $14 billion in selling pressure, with gold accounting for approximately $7 billion and silver facing up to $7.1 billion in futures sales," the note said. 

 

These mechanical-sell offs, driven by the need for passive funds to realign their holdings, are expected to trigger short-term volatility in both metals. 

 

On the other hand, copper, which sees a rise in weight to 6.4% from 5.4% and cocoa added to the index after more than 20 years are expected to receive a combined $1 billion in buying flows. Other energy commodities, such as Brent crude, are also expected to see inflows, while West Texas Intermediate crude oil and natural gas will face selling pressure, it said.  

 

Considering that markets in Japan and China are observing holidays, the resultant thinner liquidity may cause heightened volatility, the note said and pointed out that the index readjustments may create "short-term market noise."  End

 

US$1 = INR 90.01

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Udita S. Jaiswal

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.