"Traditionally gold interest rates are lower than Dollar interest rates. This gives a positive figure for the forward rate, meaning that forward rates are at a premium to spot. This condition is often referred to as contango. On very rare occasions when there is a shortage of metal liquidity for leasing, the cost of borrowing metal may exceed the cost of borrowing Dollars. In this scenario, the forward differential becomes a negative figure, producing a forward price lower than, or at a discount to, the spot price. This condition is known as backwardation."
"BACKWARDATION A market situation where prices for future delivery are lower than the spot price, caused by shortage or tightness of supply."