Future Prices for Au & Ag - Future Market Accurate?

[bl96S5eu]

Have any of you been watching future prices for a few years (or more) that can provide some input if they are an accurate reflection of the future price of Gold and Silver? The futures prices from 11/14/2011 are attached and it is interesting they show Gold going up and Silver going down over the next handful of years.

My limited understanding from the reading on the web (GATA, Butler, Sinclair, et al) is the paper markets are not an accurate reflection of the future prices but it does track when buying PMs since I've been involved over the last 7 or so years. The mark-up over spot has changed but it has not demonstrated a disconnect yet.

[osoab]

Good question. I doubt I have an answer.

Here are the links for the CME's current futures prices. This will help others.
http://www.cmegroup.com/trading/meta...ious/gold.html
http://www.cmegroup.com/trading/meta...us/silver.html

beefsteak was a trader I believe, maybe he will chime in for some clarification.

I would also look at the settlements tab to see how many contracts are traded each month.
Took a quick peak at gold. I see about 160k contracts on the front month volume. I think back in April, gold contracts were in the 270k region.
I think we had a few posts about that back then.

I do have a few points to add.

You really need to look just at the delivery months for the individual metals. That is the bigger key for the metals imho when looking at specific dates on the CME's site.

Silver is currently in Contango to the longer dated contracts starting in Sept'13 http://en.wikipedia.org/wiki/Contango

A contango is normal for a non-perishable commodity that has a cost of carry. Such costs include warehousing fees and interest forgone on money tied up, less income from leasing out the commodity if possible (e.g. gold).[1]

Gold looks normal to me. The price is higher in the future. Thank the FED for our hidden inflation tax.

Silver's action could indicate a current shortage in the metals over future production. I don't really look at company reports for that stuff, so I have no clue.

I think you are sweating the small stuff trying to find a pattern.

Collect ounces and be happy!