With the silver futures market, we are well into backwardation.
It took a few queries to arrive at this result for the gold futures market.
AI Overview
As of early 2026, the gold market has experienced periods of significant volatility, with reports indicating a shift into backwardation—where immediate spot prices are higher than future contracts—driven by tight physical supply and geopolitical tensions
. While gold usually remains in contango, recent supply chain disruptions have occasionally pushed the market into this rarer state.
- Current State: Reports in early 2026 suggest that supply chain challenges and high demand for physical metal have caused temporary, significant backwardation in precious metals.
- Definition: Backwardation occurs when the spot price of gold (or near-term futures) is higher than the price for delivery in future months.
- Causes: This condition is often triggered by physical shortages, high investment demand for immediate delivery, or, as noted in 2025-2026, geopolitical tension and trade policy shifts.
- Historical Norm: Normally, gold is in “contango,” meaning future prices are higher to cover storage and insurance costs.
Note: Market conditions can change rapidly. The shift between contango and backwardation depends on fluctuating, real-time supply and demand.