> Eventually there has to be some real demand to support a high price
Yes, of course. That's why the bubbles burst. But before that, there's a ton of money on top of the real demand, invested only in hope that more people will invest more money in hope that more people will invest... so it goes until there are no more people willing to invest.
> or else the price will drop as traders trade away to avoid delivery.
The delivery is not the limiting factor. The traders just roll forward their contracts long before the actual delivery date.
Yes, of course. That's why the bubbles burst. But before that, there's a ton of money on top of the real demand, invested only in hope that more people will invest more money in hope that more people will invest... so it goes until there are no more people willing to invest.
> or else the price will drop as traders trade away to avoid delivery.
The delivery is not the limiting factor. The traders just roll forward their contracts long before the actual delivery date.