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The situation when the cash or spot price of a metal is greater than its
forward price. A backwardation occurs when a tight nearby situation exists
in a metal. The size of the backwardation is determined by differences
between supply and demand factors on the nearby positions compared with
the same factors on the forward position. There is no official limit to
the backwardation. The backwardation is also referred to as the "back."
Wolff
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