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Silver Backwardation: Why Silver is Headed Higher

 
Girl Genius
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User ID: 1133676
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04/26/2011 02:15 PM

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Silver Backwardation: Why Silver is Headed Higher
I am learning more about the markets than I ever thought I'd care to :)

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James Turk - Silver Still in Backwardation, Headed Higher

[link to kingworldnews.com]

When asked about silver Turk remarked, “The important point Eric is that silver is still in backwardation. I mentioned to you previously in the KWN blog piece on April 1st of this year that if silver remained in backwardation when we neared the $50 area it would be a truly extraordinary event. Here we are with silver touching $49 in Asian trading this morning, yet it remains in a 63 cent backwardation from spot to December 2015.

I can’t stress enough how significant that event is. Over the past three months the price of silver has nearly doubled, yet the backwardation has not disappeared. Markets are not designed to work that way, the higher price is supposed to entice people to sell their physical and hold dollars instead. I think the market is quite clearly sending the signal that people would rather hold silver instead of paper money.

The bottom line is that as long as silver remains in backwardation, price declines will be short-lived, it’s also telling us that silver has not yet reached a top on this move.

More at above link.

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Why Silver Backwardation Matters

[...]
Backwardation in silver is a Big DealTM, as it's been over 10 years since we last saw near-term futures contracts trading higher than ones further out in the curve. In fact, not since Warren Buffett snatched up 130 million ounces back in 1997 have we seen the metal go backwardated. Even then, the condition was short-lived.

This time, however, backwardation may prove to be more persistent. (This article is from February; silver still in backwardation.)

More: [link to seekingalpha.com]

Last Edited by Girl Genius on 04/26/2011 02:20 PM
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Girl Genius (OP)

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04/26/2011 02:24 PM

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Re: Silver Backwardation: Why Silver is Headed Higher
This an extremely historic time in the metals markets. We have the opportunity to not only protect our wealth, but increase it. We can come out on the other side of this better prepared and able to take our country back :)
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Anonymous Coward
User ID: 926464
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04/26/2011 02:30 PM
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Re: Silver Backwardation: Why Silver is Headed Higher
Max Keiser is talking about some Russian billionaire wanting to corner the silver market... if this is true... then the price will skyrocket...

Today's downward move is just a blip.

I wonder if silver is still in backwardation today?
brilliant matron
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04/26/2011 02:31 PM
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Re: Silver Backwardation: Why Silver is Headed Higher
Here's the Keiser video where he talks about the Russian billionaire wanting to corner the silver market...:

Anonymous Coward
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04/26/2011 02:32 PM
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Re: Silver Backwardation: Why Silver is Headed Higher
CORRECTION IS UP!
Girl Genius (OP)

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04/26/2011 02:53 PM

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Re: Silver Backwardation: Why Silver is Headed Higher
Here's the Keiser video where he talks about the Russian billionaire wanting to corner the silver market...:


 Quoting: brilliant matron 926464


Excellent video - thank you!
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Girl Genius (OP)

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04/26/2011 03:03 PM

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Re: Silver Backwardation: Why Silver is Headed Higher
Silver: What Backwardation Looks Like

[...] When a market is in backwardation, the price for delivery now becomes higher than the price for delivery later. A negative storage premium for silver implies that buyers would rather get their silver right away even if they could pay less for delivery later. [...]

More: [link to seekingalpha.com]
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