Gold futures in backwardation for longest period on record – highlighting strength of physical demand. Global precious metals bar and coin buying hit a record level last quarter, according to the World Gold Council. Another sign of surging precious metal demand is the backwardation of the front end of the gold futures curve (see chart below). The third gold futures contract is trading at a lower price than the front futures contract for the first time since September 11, 2001. The gold curve has been in backwardation for over two weeks now, the longest period since COMEX gold futures began trading in 1975.
PGM outlook improves, with platinum holding above US$1,500/oz. Stronger European and China growth data helped boost platinum and palladium prices, driving them up 2.1% and 3.1% respectively last week. Platinum closed above US$1,500/oz. on Friday and appears poised to make a run for the upper end of the trading range near US$1,700/oz. (see chart on page 4). Meanwhile, Chinese PGM demand remains robust, with car sales over 10% higher in 2013 (up to July) on a year earlier, according to the Chinese Association of Automobile Manufacturers.
ETFS Physical Silver Shares (NYSEArca: SIVR)
