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JPMorgan Chase, the dominant player in the market, earned about $700 million from trading and handling gold, silver and other precious metals during the first six months of the year, according to people familiar quoted by Bloomberg. The bank’s best full-year performance in the business came in 2020, when it earned slightly more than $1 billion. Several other major banks also generated hundreds of millions of dollars from precious-metals trading, intensifying competition in a market long dominated by JPMorgan. Deutsche Bank, which has made a prominent return to bullion trading, earned more than $200 million from the business in the first half, a person familiar with its performance told Bloomberg. According to the report, banks worldwide are expected to generate about $5 billion from precious-metals trading this year, the highest annual total in data compiled by financial-services analytics provider Crisil Coalition Greenwich. Commodity trading has become an important source of revenue for Wall Street firms including Goldman Sachs, Bank of America and Morgan Stanley. Their desks have benefited from price swings and market dislocations caused by geopolitical conflicts and trade tensions. Precious metals have been particularly profitable as speculative buying drove gold and silver to record highs earlier this year. Demand also surged for short-dated options and leveraged exchange-traded funds as investors sought amplified exposure to the rally. Banks made additional profits by transporting bullion between trading hubs to exploit differences in regional prices. “Most people I’ve spoken to here had a very good year, a record year,” said Greg Frith, senior precious-metals trader at Centalion Group, formerly known as Gunvor, during a panel discussion at the London Bullion Market Association conference in Italy. Several banks are also seeking entry into the small group of institutions that provide the vaulting and clearing services underpinning London’s gold market, the world’s largest bullion-trading centre. Citigroup became the first new participant in a decade earlier this year, joining JPMorgan, UBS, HSBC and ICBC Standard Bank. Deutsche Bank is also seeking membership, according to people familiar with the matter. Morgan Stanley is pursuing a similar move, Bloomberg previously reported. Banks’ global precious-metals trading revenue had already reached a record last year and has continued to increase, “supported by elevated volatility and strong investor participation across both gold and silver markets,” Angad Chhatwal, head of fixed income, currencies and commodities at Coalition, told Bloomberg News. January was especially profitable as speculative buying pushed gold and silver to unprecedented levels. Prices have since eased after the outbreak of war in the Middle East drove energy costs higher and revived expectations of monetary tightening. Even after the pullback, spot gold and silver remain at more than twice their levels at the beginning of 2024. Heightened volatility can also magnify losses when trading desks are caught on the wrong side of a market move. Sentiment at the LBMA conference remained broadly upbeat following several years of double-digit price gains and rising investor interest, although industry executives also warned against complacency. “It’s been a record year for us, and lots of other traders,” Frith added. “But it’s no time to be complacent because, you know, if you’re caught napping on the job, it’s all gone in a flash.” (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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