Front month (Sept 11) silver settled Tuesday at 40.081, and front months settled in contango through the Jan 2013 contract. Silver now enters backwardation with the March 2013 contract, with backwardation increasing from the March 2013 contract on out, culminating in a $1.413 (3.5%) discount on the farthest out contract of July 2016, which settled at 38.688.
While its clear that silver traders remain concerned about the liklihood any silver will remain on the COMEX to satisfy deliveries 4-5 years from now (hence the significant backwardation or discount to front months), we believe that when the long awaited physical default is imminent, we will see significant backwardation in ALL MONTHS, signaling the end is near.
This is excellent news for silver bugs and physical metal accumulators, as it indicates that while rapidly dwindling, time remains to continue accumulating the phyzz.
Daily Settlements for Silver Futures (PRELIMINARY)Trade Date: 09/20/2011
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