Gold Backwardation: Should We Care Or Not?
Aug 22, 2013
Vince Lanci is on Kitco News to talk about gold backwardation and negative GOFO rates as well as why this uncommon occurrence is happening on this edition of “RESET.” The 1,3, and 6-month Gold Forward Offered Rates (GOFO) rates slid into negative territory in early July as the gold October contract first entered into backwardation. According to Lanci, gold has no reason to ever be in backwardation but it may offer an arbitrage opportunity. The question is, why isn’t anyone taking advantage of it? “The concept of backwardation in gold makes me scared to be short, but the market isn’t overbought yet,” Lanci says. Tune in now to hear Lanci’s take on backwardation and why people seem to be ignoring this market condition that we should maybe keep a close eye on. Kitco News, August 22, 2013. (show less)