Contango

Contango describes a futures curve that slopes upward, where contracts further from expiry trade above nearer contracts and above spot. For precious metals this is the usual condition because holding metal involves financing and storage costs, which are embedded in the forward price as carry.

For a bullion trader, contango shapes the cost of holding or rolling a futures position. When a near contract expires, rolling into a pricier later contract carries a cost, which matters for anyone holding exposure across expiries on MCX or COMEX.

The steepness of contango can shift with interest rates and financing conditions. It is a structural feature of the forward curve rather than a directional forecast, so it informs roll and carry decisions rather than predicting which way the metal will move.