In a contango situation, futures prices are higher than the spot price. This normally occurs when there are no benefits to holding an asset, or when the costs of storing an asset are high enough to offset the benefits of holding the asset. An increase in the availability of asset-backed loans would increase the convenience yield of silver, which would not cause a contango situation. A silver discovery could have some effect on the price of silver, but should not affect a contango situation one way or another. On the other hand, an increase in storage costs would offset some of the convenience yield. We don’t know whether such an increase in costs would be enough to make the net cost of holding silver positive, but any increase in costs could contribute to a contango situation |
