As Bloomberg reports, the main factor behind the profit growth was a sharp jump in gold and silver prices – the strongest since 1979. Analysts attribute this rally to Donald Trump’s return to the White House. Investors were concerned about his plans to impose large-scale import tariffs, as well as pressure on the independence of the US Federal Reserve.
How gold was resold
It was tariff policy that became a key source of super profits for banks. Fears that precious metals could be hit by new duties in the US led to a significant price gap between New York and London. As a result, traders actively used arbitrage: they bought cheaper metal in London and resold it in the US with a large markup.
“While some banks found themselves on the wrong side of the deal and suffered losses, others were able to make substantial profits on this price gap,” said Angad Chhatwal, head of FICC at Coalition. According to him, it was arbitrage that was the main driver of earnings in 2025.
The previous revenue record was in 2020, during the COVID-19 pandemic. At that time, disruptions in air travel disrupted bullion shipments and also caused sharp price differentials in the markets.
Banks are actively investing in precious metals
An additional factor of profit growth was a surge in demand from hedge funds and asset managers. Trading volumes in London have been growing throughout the year, prompting banks to expand their business in this segment. In particular, such financial groups as Nomura Holdings and Deutsche Bank began to actively build up their precious metals trading divisions.
According to analysts, high profitability of the market attracts new players: many banks either launch such operations from scratch or return to them after a long break.
