According to a report from the Wall Street Journal,"gold and silver futures surged as an influx of new investors and the rebalancing of two major commodity indexes bolstered prices''.
Gold for February delivery, the most actively traded contract, was recently up $20.60, or 1.7%, at $1,222.90 a troy ounce on the Comex division of the New York Mercantile Exchange.
Silver for March delivery, the most active contract, was up 64 cents, or 3.3%, at $20.010 a troy ounce.
The first day of the new year brought a flurry of investors to the precious-metal market as portfolio managers allocated cash across the spectrum of different assets, said Graham Leighton, a precious-metals broker with Marex Spectron in New York. Mr. Leighton said markets often see increased activity at the start of a month, but "at the start of the year there tends to be more money coming in than any other month."
The rebalancing and re-weighting of the Dow Jones UBS Commodities Index also provided support to gold and silver. The index raised its allocation to gold and silver for 2014 from 2013, and funds that track this index must recalibrate to the new allocations in January.
"This rebalancing is going to create some buying for the first week or so, or at least support the market," Mr. Leighton said. Roughly 1.5 million to 1.8 million ounces of gold and about 50 million ounces of silver will be bought as a result of the index shifts, he said.
