In 2025, silver (XAGUSD) posted its best year since 1979, and the precious metal is rising higher on the first day of 2026 in response to a warning to Iran from President Trump. Silver is viewed as a safe-haven asset and tends to perform well during times of geopolitical uncertainty.
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“If Iran shots and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue,” Trump said in a Truth Social post on Friday. “We are locked and loaded and ready to go.”
Silver Rally Could Trigger Forced Index Selling
At the same time, silver’s historic rally could also lead to an index rebalancing that pressures its price. Silver currently accounts for about 9% of the Bloomberg Commodities Index, much higher than its 2026 target weight of about 4%. That could result in forced selling of silver contracts by passive tracking funds to the tune of $5 billion.
“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,” wrote TD Securities senior commodity strategist Daniel Ghali. Ghali cautioned that low volume following the holiday season could create even more volatility for the metal.
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