``I believe that backwardation has been prevailing for some time, particularly when dealing in size. In other words, for the past several weeks a buyer might not have seen negative forward rates when being quoted for $1,000,000 of physical gold. But if the buyer wanted a ton of gold - which is worth more than $40 million - he needed to wait a week or more for delivery, which, in effect, is saying the same thing as backwardation.''

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