Silver Backwardation

[harumph]

Silver, apparently, is currently experiencing a level of backwardation, indicating that futures contracts are not able to make physical delivery if the contract is demanded to be fulfilled in metal.

This should bode well for silver price - and might explain the sudden spike in the price.

http://en.wikipedia.org/wiki/Backwardation

full article here: (hardassetinvestor are biased obviously, but the analogy appears sound)

http://www.hardassetsinvestor.com/features-and-interviews/1/2552-why-silver-backwardation-matters.html

[BobBobson]

Silver, apparently, is currently experiencing a level of backwardation, indicating that futures contracts are not able to make physical delivery if the contract is demanded to be fulfilled in metal.

This should bode well for silver price - and might explain the sudden spike in the price.

http://en.wikipedia.org/wiki/Backwardation

full article here: (hardassetinvestor are biased obviously, but the analogy appears sound)

http://www.hardassetsinvestor.com/features-and-interviews/1/2552-why-silver-backwardation-matters.html

I don't understand the mechanics behind the idea; that silver futures contracts for delivery in the near future are quoting a higher price than silver futures for distant delivery, which means that thier is a shortage of physical silver and thus an upward pressure on the price.

and to be honest, I dont think many people do seem to understand how this is meant to work. Or if they do, they dont make it clear in thier writings.

Edited February 20, 2011 by Retardstic

[azogar]

dave morgan talking some sense on GSR

http://radio.goldseek.com/

also if you need a bearish view to counter the bulls:

http://www.marketoracle.co.uk/Article26411.html

however, i find the author at fault for seeing silver as a proxy for Gold - there is (reportedly) less above ground silver than gold, people need to remember this!