Spot Silver Premium in Shanghai Indicates Tight Physical Market
- On December 24, spot silver on the Shanghai Gold Exchange closed at a premium over futures contracts.
- This price structure is known as backwardation, suggesting a tight physical silver supply in China.
- Backwardation often indicates higher demand for immediate delivery compared to future dates.
The recent backwardation in the silver market on the Shanghai Gold Exchange suggests a snug physical market, with spot prices surpassing futures contracts as of December 24, indicating increased demand for immediate delivery.
This development highlights the current tightness in China’s physical silver supply, as reflected by the premium of spot prices over futures contracts, a classic sign of backwardation. Source
