Its been a while since we examined futures contracts to get a feel on how tight the silver market is.
Silver market tightness seems to have eased slightly, as silver is now in contango from current month June 2011 through March of 2012. From March 2012 on out however, silver remains in backwardation. For readers new to the silver market, contango is a normal market condition, where a commodity’s contracts typically are more expensive further out into the future, as the holder of the asset must account for storage fees, insurance, etc. When a market is in backwardation, this means that future contracts are selling at a discount to the current month, and indicates that there is either a distrust of the currency the commodity is priced in, (the US dollar in this case) or else there is a concern that the commodity will not be available when the contract comes due (exchange default concerns).
The Dec 2015 contract is now trading at a $1.05 discount to June 2011.
|New York Mercantile Exchange (NYMEX) › Metals › SILVER (SI)|
|SI.M11||Jun 2011||38.303||+0.188||set 14:06|
|SI.N11||Jul 2011||38.305||+0.215||set 14:06|
|SI.Q11||Aug 2011||38.317||+0.122||set 14:06|
|SI.U11||Sep 2011||38.329||+0.239||set 14:06|
|SI.Z11||Dec 2011||38.351||+0.191||set 14:06|
|SI.F12||Jan 2012||38.340||+0.446||set 14:06|
|SI.H12||Mar 2012||38.315||+0.175||set 14:06|
|SI.K12||May 2012||38.281||+0.445||set 14:06|
|SI.N12||Jul 2012||38.256||+0.061||set 14:06|
|SI.U12||Sep 2012||38.237||+0.387||set 14:06|
|SI.Z12||Dec 2012||38.218||+0.208||set 14:06|
|SI.F13||Jan 2013||38.187||+0.450||set 14:06|
|SI.H13||Mar 2013||38.12||+0.45||set 14:06|
|SI.N13||Jul 2013||38.035||+0.447||set 14:06|
|SI.Z13||Dec 2013||37.913||+0.456||set 14:06|
|SI.N14||Jul 2014||37.720||+0.447||set 14:06|
|SI.Z14||Dec 2014||37.588||+0.456||set 14:06|
|SI.N15||Jul 2015||37.386||+0.451||set 14:06|