In our July 28th update, silver backwardation in back month contracts had increased to a 0.781 discount on front months.
With Thursday's close, silver remains trading in contango from front months through the July 2012 contract, and enters backwardation with the September 2012 contract.
Backwardation is skyrocketing in from the Sept 2012 contract on out however, with the July 2016 contract trading at a $1.241 discount to front months!
As we have stated previously, we believe that this increase in silver backwardation is a result of COMEX default risk, and not dollar aversion.
The fact that back month backwardation continues to increase while silver has corrected $5 indicates that traders want their silver NOW, they are not comfortable holding a contract that matures further than 12 months out.
We will continue to monitor the situation and update our readers to any significant changes or moves.
For newer readers who would like an explanation of backwardation vs. contango in a market, please see our explanation here:
|Daily Settlements for Silver Futures (FINAL)Trade Date: 08/11/2011|
|Prior Day |