To me, the most fascinating part of this Silver kerfuffle has been the backwardation of the futures curve. Overnight action.pic.twitter.com/IUZRSTnulT
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What I'm not getting is why Mar fut is still trading above spot (eg XAG= on Reuters) if convenience yield of holding physical is so high?
e.g. right now I am seeing 29.52 spot vs 29.83 Mar fut and 29.65 May fut, just a very weird pattern
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That is interesting. Another explanation for the backwardation may be option activity linked to the more forward contracts. And this doesn't necessarily suggest a shortage of physical
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Or traders with access to the futures market but not spot piling into the near month futures without thinking? I don’t have a much better explanation than this!
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