via Yahoo - Futures Chain

The gold price was in backwardation briefly on Friday, though it looks like the close brought back the Contango. A Contango means that prices are expected to rise for the forseeable future. If gold was in Backwardation, then very likely it would be in a parabolic phase. You have to wonder what the parabolic phase will look like eventually, and how it might come about.

They say in government bonds, the point of no return would be interest rates beyond 7%, that a government goes into default when it can no longer pay its obligations. Perhaps its the same with gold bullion prices, where the spot price would have to maintain a spread over the near futures price of 7% before a massive parabolic phase gets under way.

You could theoretically make a return by buying the near futures price and settling in a month, as long as a spread is maintained.

http://finance.yahoo.com/q/fc?s=GCX12.CMX

-F6