P. re Futures.
Not necessarily, altho if the disparity is increasing then it's a good indication of higher prices down the road.
for example, it costs a lot of money to hold gold, in storage fees and the like, and the longer out you buy it, the higher a premium you pay for it, in the price. So the far out gold contracts usually are at a premium to the near months.
Sometimes it's purely seasonal, as with grains. It's good to watch the spread between near and far contracts to see what's happening. There are charts that are simply the spread between two contract months.
I'm not as familiar with the peculiarities regarding silver as I am gold, but I think it's similar.
oh yea, and what Steve said too <g>. Storage costs. I've never had 5000 bushels of soybeans delivered to my house, so I don't know what it costs to store the stuff.
"Honey, is there anymore space in the guestroom for more soybeans?"
KH |
