JPMorgan Chase & Co. JPM is preparing to deliver gold bullion valued at over $4 billion in New York this February, amid rising prices and increased demand for the precious metal.
What Happened: The bank, recognized as the largest bullion dealer globally, announced on Thursday. According to a report by Bloomberg, JPMorgan plans to deliver gold against contracts expiring in February on the CME Group’s Comex.
The delivery notices, amounting to 30 million troy ounces, represent the second-largest tranche on record since 1994.
Gold futures on Comex have surpassed London spot prices due to tariff concerns following President Donald Trump’s election. This has created a profitable arbitrage opportunity for banks capable of swiftly moving bullion between trading hubs.
Similar pricing trends have been observed in other Comex contracts, prompting traders to fly silver into the U.S. for the first time, despite its usual cost-prohibitive nature, the report added. While millions of ounces trade daily on Comex, only a small fraction typically results in physical delivery.
Since the U.S. election, physical inventories in Comex depositories have increased by 13 million ounces, valued at approximately $38 billion.
It remains unclear if JPMorgan and other banks are delivering bullion for arbitrage or to exit short positions.
Why It Matters: The timing of JPMorgan’s gold delivery coincides with Trump’s announcement of new tariffs on imports from Canada, Mexico, and China, effective Feb. 1. These tariffs have already caused ripples in financial markets, raising concerns about their economic impact.
Gold has recently hit a record high, surpassing $2,790, driven by central banks’ easing stance and increased demand for safe-haven assets. Several major central banks have signaled a more dovish stance on inflation, leading speculators to anticipate lower borrowing costs, further supporting gold prices.
Additionally, speculation over higher U.S. tariffs has led to increased demand for gold by central banks, with disruptions affecting trading in London.
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