Bank Gold Traders Capture $500 Million Windfall Amid US Tariff Fears

Gold 

Gold rush to US warehouses driven by arbitrage premium

JPMorgan and Morgan Stanley lead massive bullion deliveries to Comex

Top-tier global banks earned $500 million in Q1 2025 from precious metals trading, their best performance in five years. According to Crisil Coalition Greenwich, the surge was fueled by a unique arbitrage opportunity tied to anticipated US tariffs on gold and silver.

As gold and silver prices on New York's Comex exchange spiked above global benchmarks, traders rushed to capitalize. Bullion was shipped from London, Switzerland, and Hong Kong into US futures warehouses to lock in premium spreads before tariff policies took effect. The arbitrage mirrored 2020 conditions, when pandemic-related flight restrictions created a similar supply squeeze.

Morgan Stanley delivered 67 metric tons of gold to Comex, worth approximately $7 billion at current prices. This made it the largest bullion handler among banks in Q1. JPMorgan, historically the most dominant dealer in precious metals, delivered over $4 billion worth of gold to settle February futures—marking one of the largest daily delivery volumes in Comex history.

Although President Donald Trump ultimately excluded bullion from the new tariff package in April, the early uncertainty had already driven heavy physical movement and massive trading volumes. The rush ended abruptly once the exemption was confirmed, halting the arbitrage opportunity.

Bank metals desks benefited not only from the price dislocation but also from higher volatility. Analysts at Coalition noted that geopolitical risk and macroeconomic uncertainty, especially around US trade policy, intensified gold market activity. Trading volumes in London, the world’s largest OTC bullion market, also surged during the gold price rally that has seen the metal double since late 2022.

ScrapInsight Commentary:

While scrap gold and silver markets are less affected by exchange-based arbitrage, these events highlight how macro policy can trigger large-scale bullion movements. For recyclers and refiners, sharp price dislocations increase market risk but may also offer new premium opportunities in US-bound shipments. Watching monetary policy and geopolitical moves will be critical for navigating precious metal pricing volatility.