Precious metals traders at major global banks, including JPMorgan Chase and Morgan Stanley, posted their strongest first-quarter performance in five years, driven by lucrative gold arbitrage opportunities and surging market demand.
According to market intelligence firm Crisil Coalition Greenwich, 12 top-tier banks collectively earned $500 million in revenue from their precious metals trading desks in Q1 2025—double the average quarterly earnings of the past decade and the second-highest figure recorded in ten years.
A significant driver of this surge was a sharp premium on gold in the U.S. market earlier in the year. Heightened fears over new tariffs on precious metals under former President Donald Trump’s reciprocal tariff plan triggered a rush to move gold and silver into the U.S. before potential restrictions took effect.
Arbitrage Opportunities Spur Global Gold Shipments
The price differential between gold futures on the New York Mercantile Exchange (Comex) and London spot prices created a compelling arbitrage window. Traders bought physical gold in centers like London, Switzerland, and Hong Kong, then shipped it to the U.S. to profit from higher Comex prices.
This surge in transatlantic trading led to rare logistical pressures. Bank of England vaults reportedly saw long queues for gold bar withdrawals, as anxious traders and bankers urged for expedited release procedures to meet delivery deadlines.
The last comparable wave of arbitrage activity occurred during the 2020 COVID-19 pandemic, when commercial flight disruptions created extended price dislocations between global gold markets.
Major Banks Lead Delivery Volumes
Morgan Stanley emerged as the largest gold deliverer on Comex in Q1 2025, settling proprietary positions with 67 metric tonnes of gold—valued at around $7 billion at current prices. JPMorgan Chase also made headlines in February by delivering over $4 billion worth of gold in a single day, setting a new record for the largest one-day delivery notice in Comex history.
These record deliveries underscore the ability of major institutions to profit from physical-to-futures market imbalances. JPMorgan Chase, in particular, has a well-established track record of capitalizing on such arbitrage windows—most notably in 2020, when its metals trading division generated a record $1 billion in revenue.
Tariff Fears Sparked Volatility—and Opportunity
The abrupt end to the arbitrage window came in April 2025, when gold was ultimately excluded from the Trump administration’s tariff plans. Still, the volatility that preceded the decision provided fertile ground for bank traders.
“Volatility surrounding the tariff proposal was a key revenue driver,” said Angad Chhatwal, Head of Fixed Income, Currencies, and Commodities (FICC) at Coalition. “It created fast-moving dislocations that these institutions were well-positioned to exploit.”
Broader Trends in Gold Trading
Since late 2022, gold prices have more than doubled, reflecting a broad shift toward safe-haven assets amid inflationary pressures, currency fluctuations, and geopolitical risk. This surge has fueled increased trading activity on global platforms, especially in London—still the world’s largest over-the-counter gold market.
As market dynamics evolve, traders are likely to remain alert for further dislocations, especially those driven by policy uncertainty or supply-chain constraints. For now, the Q1 performance signals that gold remains one of the most lucrative corners of commodity trading for global investment banks.
