Backwardation is a commodity term that is used to describe a situation where the spot price (the ‘right now’ price) is greater than the future price (the price that is available on forward contracts). Gold has not seen backwardation in generations, is this a symptom of a very high spot price or is it a weakening future price? Normally gold, like other non-perishable hard commodities is in contango which means the yield curve is always sloping upwards, Silver did see a one day backwardation in the 80’s (due to moving it from the COMEX to to CBOT warehouse). Gold is seen as a true preserver of wealth and at a time where many feel even cash may become trash it is getting more focus than ever.
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