Market Curiosity: Exploring Markets And Systems

February 16, 2011

Very interesting development in COMEX backwardation

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 7:00 am

Look how yesterday’s COMEX silver settlement prices declined in the far forward contracts.

It’s also interesting because this is reflected in recent LBMA backwardation too.

Scotia Mocatta now has 1, 5 and 100 oz bars, but is now out of 1 kg bars.

James Turk: (and a great discussion on “silver hedges”) In fact, the backwardation is steepening almost every day. The 13-cent backwardation to Dec 2015 I mentioned previously has now widened to 32-cents, meaning physical silver is becoming even more scarce – and the shorts are in an even more difficult position… So even if a bullion bank is borrowing silver to sell spot to complete a hedge for a mining company, the important point is that the spot market is absorbing everything the bullion banks can throw at it, and even more importantly, silver remains in extreme backwardation which itself is growing. All of this is very bullish, but here’s another even more bullish interpretation of this hedging.

+ Silver backwardation update: Partial at COMEX day 8; full at LBMA day 9; Scotia Mocatta low; Tulving (almost) fine

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