"Real1" has sent a link to the Virtual Metals Hedge Book and the report that discusses this issue. The data is dated somewhat, as you will see from the chart below, but the issue is one I have said in recent articles is likely to put a stop to the price parabola at some point.

What that will lead to, as happened in 1979-80, is extreme action-reaction in markets. Nimble traders thrive in markets like this.

Here is the VM report. Download VM file

Here is a chart from page 4 of that report shows the spot price tracking the 24-month forward price, which clearly shows the losses a hedger would have suffered after the PM rally began a couple years ago.

But there is another side to that metal coin. Traders must be watching the spot market relative to the futures market for signs of backwardation at this point. It started to show up late last week, as I reported, but straightened out on Monday.

I'd appreciate some of you pro traders keeping the Little People abreast. TIA.