Loading ...Pressure building Gold Futures (+1688$)
+40$ premium (contango) currently over spot. Let’s see if we get to +70$ we had a little while back and see were the price settles.
Lock-step climb.
Edit: adding contango 1 hour chart. after the cooling off while consolidation.. things are heating up once again.
Edit: adding silver’s 1 hour chart with contango analysis. Already showing signs of over heating. Took a lot of energy to get back here.
What ever happened to Backwardation ?
There is none right now.
What does it mean when the Contango widens like this Patrick ?
I think it means the Futures market is doing fine and there is no chance of a default.
Big Players are satisfied the Gold is there ?
I’m not 100% sure what is means from the contango side.. apart for expected gold prices in the futures should be more than what they are today… (I will have to dig more into that side of equation). Recently, I was more trying to understand backwardation. As it should not happen as this creates an arbritage situation. Gold producers/owners would be are willing to sell their physical gold (spot) for fiat and buy futures (cheaper), knowing they will get their gold back when futures contract expires and settle for delivery. That is normally the cure for backwardation, as the discount for futures would disappear with the gold owner bids. The problem is when gold owners DO NOT trust paper fiat. They say.. wait, this fiat is crap.. its being inflated away… I don’t want any. Then when backawardation occurs, they refuse to sell their physical gold at spot for it, remvoing the bid for fiat AND also removing their physical gold from the ask. Physical Gold value is now INFINITE. A micro gram of it could buy the entire world debt.
You don’t want to see backwardation.. It’s increasing frequency indicates stress.. mistrust.. gold producers/owners removing their bid for fiat currency. The theory is they will eventually happen more and more and one day.. stay permanent. That is the end game. I don’t think we want to go there.
Looks like the old highs are going to be challenged this year.
Those patterns now on GDX and XGD look more like giant slingshots or bows and arrows than triangles.
ALOT of strength today in precious metals.