Hua Er Jie Jian Wen·2025-06-10 05:56Core Insights - The article highlights a significant profit opportunity for top investment banks due to a surge in precious metals trading amidst tariff fears, resulting in a combined revenue of $500 million in Q1 2025, the second-highest in a decade [1][2]. Group 1: Market Dynamics - The primary driver of this unexpected profit is the substantial premium in the U.S. market, as traders moved large quantities of gold and silver to U.S. futures exchanges due to concerns over potential tariffs [2]. - Gold and silver prices on the New York Mercantile Exchange (Comex) surged above other international benchmarks in Q1, creating an ideal arbitrage window for traders [2]. Group 2: Bank Performance - Morgan Stanley led the way by delivering 67 tons of gold to the New York Mercantile Exchange in Q1, valued at approximately $7 billion at current market prices [3]. - JPMorgan Chase also performed strongly, settling over $4 billion in gold for February futures contracts, with one delivery notification being among the largest in the exchange's history [3]. Group 3: Historical Context - The current arbitrage opportunities echo similar situations during the pandemic in 2020, where banks that found ways to transport gold to New York profited significantly, contributing to JPMorgan's record $1 billion revenue in its metals division that year [4]. - The volatility triggered by the Trump tariff plan has also contributed to revenue growth for the 12 banks involved, alongside a doubling of gold prices since late 2022, which has increased trading volumes in London [4].