Precious metal traders at top-tier banks, including JPMorgan Chase and Morgan Stanley, have just achieved their best performance in five years in the first quarter, partly due to arbitrage opportunities that triggered a significant influx of gold bars into the US.
According to data compiled by Crisil Coalition Greenwich, 12 major banks in the industry collectively generated $500 million in revenue from precious metals businesses in Q1 2025, the second-highest figure in a decade. The market intelligence firm stated that this figure is roughly double the average quarterly earnings over the past decade.
Part of this windfall came from the high premium on gold in the US market during Q1, as concerns about potential US tariffs on precious metals led traders to rush large quantities of gold and silver into the US in advance.
As previously reported by Caixin, in Q1, the prices of gold and silver futures on the New York Mercantile Exchange (Comex) surged to levels significantly higher than those of London gold, the international benchmark. This meant that traders could purchase gold bars in trading centers such as London, Switzerland, or Hong Kong, China, and then ship them to the US to profit before tariffs took effect.
This even led to weeks-long queues for gold bar withdrawals from the Bank of England's vaults. Officials overseeing the London gold market received anxious calls from many bankers and traders, urging for streamlined processes.
A similar situation occurred in 2020, when the COVID-19 pandemic grounded commercial flights, creating sustained arbitrage opportunities for banks seeking ways to transport gold bars to New York.
According to exchange data, Morgan Stanley delivered more gold than any other bank when settling its proprietary Comex positions, delivering a total of 67 mt of gold. At current market prices, this batch of precious metals is valued at approximately $7 billion.
In addition, JPMorgan Chase, as a major trader of precious metals, once delivered gold worth over $4 billion to settle gold futures contracts in February, marking the largest single-day delivery notice in Comex history. Arbitrage trading only came to an abrupt halt in April after gold was excluded from Trump's reciprocal tariff plan.
Many banks engaged in gold and silver trading—particularly JPMorgan Chase—have historically excelled at profiting from transatlantic price dislocations. Five years ago, unprecedented arbitrage opportunities helped JPMorgan's metals trading division achieve record revenues of $1 billion in 2020.
Angad Chhatwal, Head of Fixed Income, Currencies, and Commodities (FICC) at Coalition, stated that the volatility triggered by Trump's tariff plan also generated revenue for these 12 major banks. In recent years, amid the astonishing surge in gold prices, which have doubled since the end of 2022, trading volumes in the London market have also been growing.
