AGQ’s Backwardation Squeeze Risks Delivery Default Despite 184% Yearly Rally

A COMEX physical-delivery squeeze has inverted the silver futures curve into backwardation, driving ProShares Ultra Silver (AGQ) to a ~184% return over the past year via positive roll yield, though the 2x leveraged ETF is down ~28% year-to-date amid volatility decay. With open interest nearing ~100,000 contracts, analysts warn of tail risks from potential delivery defaults, exchange interventions, or rule changes that could whipsaw futures prices away from spot. Elevated 10-year Treasury yields near 4.4%, recent VIX swings from ~31 to ~17, and persistent CPI pressures raise the opportunity cost of non-yielding metals, positioning AGQ as a short-term tactical tool only.