via INO.com - December 2015/Jun 2021 Spread

With the close on Friday, the spread continued to narrow between the near-dated future and long dated futures.

For gold prices to be truly into backwardation, the nearest dated futures price has to be higher than the longest dated futures price. At the very top of the gold bull market, the nearest dated futures can be ~70% greater than the longest dated futures.

A five ounce gold coin was bid up to $169 above the face value of $100 in 1869 during the cornering of that market, setting off 'Black Friday' with the crash that followed. Remains to be seen how the gold market will be affected by its re-rating. Very unlikely that a similar frenzied corner will occur, because the cornering of financial interest in any market is done through derivatives.

A mania can occur, as it had in oil prices, but a truncated bull market can occur as it had in copper. Silver prices went to ~14X the absolute lowest price in 1993 and now resides approx. 4X the low, while oil prices went to ~14X the lowest price in 1998, and now resides @ approx. 4X the low. If we go into a huge speculative mania, then the crash that follows will be dire, indeed. The 'form' of the gold price wave complies with a Wave One extension so far, and has not broken those rules. Both silver and oil bull markets differed in their wave form.

I assume that once the gold bull is done that gold will settle in to a very low volatility asset. Commodities prices that had seen backwardation have all settled into higher prices since the beginning of their respective bull markets.

Gold prices entering into backwardation aught to signal the final leg in the gold bull market, though it has been very much delayed by a prolonged derivatives backdrop. There is a possibility that it could take a single day of trading on a volatile day for gold prices to enter into backwardation. It would probably pop in and out before becoming established.

http://quotes.ino.com/charting/index.html?s=NYMEX_GC.Z15_M21.E&t=l&a=0&w=1&v=dmax

$TNX:!PRII Weekly

Monday's close for gold prices this week saw a small bump in this indicator, just above the 34-week EMA. What followed was a rally in gold prices along with a market decline on Tuesday. Perhaps we'll see something very similar on Monday next week to follow on Friday's close.

http://schrts.co/tQJkHW

-F6