Originally Posted by Tropic Cat
Although Gold is traded every day around the world in open markets, it's a little known fact that when speculators attempt to purchase
Gold for actual delivery,
it can not be purchased at any price
Absolutely true, Rick, and when the reality of this "backwardation
"* sinks in with the investing public, memories of the recent selling-panic will vanish, and a gold-buying panic will quickly set in.
is the rare phenomenon whereby the price of a commodity in the nearest delivery
month is higher than the price of the same commodity in future delivery
months. In a normally-traded futures market, the further out in time one contracts for delivery, the higher the price of the commodity. These accompanying carrying costs are a function of the inherent risks which accompany increased time until delivery, and are called "contango." When contango disappears and prices go into backwardation, the markets are revealing that the underlying commodity is no longer available for immediate delivery.