Backwardation and silver to hit US$50 an ounce.

I learned something new today and it is called "backwardation". This is defined as "a situation where the price of a commodity for future delivery is lower than the price for immediate delivery."

James Turk, CEO and co-founder of GoldMoney believes that silver is in backwardation to 2015 and that the demand for physical metal is so much higher that people don't want paper any more, they want the real thing. Silver looks like it's going to go to at least US$50 an ounce in 2011.

While I believe that investing in silver is potentially more rewarding than gold in 2011, this is a very bullish forecast from the gentleman. I am still waiting for a more substantial correction before increasing my long position in silver.

Related post:
Silver broke short term resistance.

Reference:
Silver to reach $50 in 2011 and gold at $8,000 by 2015.
by Geoff Candy, 11 Feb 2011.