Gold Basis and Co-Basis
The framework for reading the pulse of the gold market — where futures meet spot, the monetary system reveals its condition.
Antal Fekete
The Definitions
Basis = Futures Price − Spot Price.
Co-Basis = Spot Price − Futures Price.
When the basis is positive (contango), futures trade above spot — the normal condition. Holders of gold are compensated for lending it. When the basis turns negative (backwardation), spot trades above futures — holders refuse to part with physical gold at any futures premium.
Why It Matters
The gold basis is the vital sign of the monetary system. Persistent backwardation means the market is losing confidence in the ability to deliver physical gold against futures contracts. It is the market's way of saying: “I want the metal, not the promise.”
The Toolkit
The Gold Basis Monitor computes this in real time using Schwab futures data and metals API spot prices.