by Gene Arensberg , Got Gold Report:
Not only is the spot or cash price (the price for gold sold for immediate delivery) trading above the near active futures contract, but we are now seeing the near months’ contracts trading at higher prices to months thereafter in the front part of the futures strip.
This backwardation is occurring at the same time when the gold forward offered rates in London, the interest rate offered for gold by bullion banks called GOFO, have been negative for a full month (beginning July 8) and appear at last glance to be widening (growing even more negative). Essentially that means that gold is commanding a higher interest rate than U.S. dollars which is the same thing as saying that demand for immediate delivery and soon to be delivered gold is high enough to pay a premium for gold today.
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