eyeQ: silver and the catalyst for a commodity correction
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Now, it’s spotted a bearish signal on this miner.
8th January 2026 10:52
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
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BHP
Macro Relevance: 73%
Model Value: 2,160.76p
Fair Value Gap: +8.75% premium to model value
Data correct as at 8 January 2026. Please click glossary for explanation of terms. Long-term strategic model.
eyeQ’s smart machine has fired a bearish signal on BHP.
The stock is back in a macro regime. After a great run, macro momentum has stalled with eyeQ model fair value treading water just over the 2,000p level. The stock price has ignored the loss of a macro tailwind which, in our eyes, means this latest surge higher has moved into thin air. The risk-reward has shifted to suggesting holders consider some top slicing.
BHP Group Ltd (LSE:BHP) is a great way to gain exposure to base metals such as copper and iron ore. And the medium-term arguments for a commodity super-cycle remain very strong.
But be aware of the index re-balancing effect. Today, the 2026 re-balancing of the big, broad commodity indices such as BCOM and GSCI kick off. Because silver rallied so hard last year, its weight in these indices has shot higher and that will be revised lower back towards historical norms. In the case of BCOM, silver’s weight is going to fall from around 10% to around 2%.
Ultimately, such is the shift in demand for silver, you can make the case that, over time, silver’s weight in these indices will rise. But right here, right now, the result is effectively a downgrade, which means we’re going to see outflows as passive funds re-adjust back to benchmark weight.
For active investors this could well provide a dip-buying opportunity, but commodity bulls need to be aware of this re-balancing effect, which continues into next week.
BHP is not a silver play, but silver has become the poster child of the commodity rally, and so there is a chance that this dynamic is the catalyst for a correction in the commodity complex more broadly, including mining stocks.
Again, this could simply present better levels to re-load. But macro plus market technicals are suggesting the balance of risks has shifted in the very near term.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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