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HomeGlossaryBackwardation

Glossary


Backwardation

Backwardation, along with Contango, is a term that's used frequently in commodities markets. In gold and silver bullion terms, backwardation is when the future price of the metal is likely to be lower than the spot price. For example, if you buy gold at £1000 per ounce today but estimated figures show that in six months the price is likely to drop to £900 per ounce, the market will be in backwardation.