JPMorgan’s grip on London gold vaults challenged by rival banks
Citigroup Inc. and Morgan Stanley are among banks preparing to challenge the dominance of JPMorgan Chase & Co. in the global gold market by seeking to offer vaulting services in London, as investor interest in the precious metal surges.
Citi is well advanced in the process of setting up a business that would allow it to become a clearing member of the London gold market, according to people familiar with the matter, who asked not to be identified as they weren’t authorized to speak publicly. Morgan Stanley’s plans are at an earlier stage, but it aspires to expand its physical precious metals offering to include vaulting and clearing, other people said.
Clearing members provide a crucial role in London, the global hub where more than $1 trillion in gold is stored, by offering vaults where precious metals can change hands to settle contracts. But their number has dwindled to just four banks in recent years, as some firms stepped back from commodities and others balked at the costs of operating a vault.
Spokespeople for Citi and Morgan Stanley declined to comment.
JPMorgan has become increasingly dominant in London’s gold market in recent years. The US bank, long the largest player in precious metals, is custodian of the lion’s share of the exchange-traded fund gold in London, and also accounts for a large share of the remaining holdings outside the Bank of England, according to people familiar with the matter.
Gold’s dramatic rally this year has thrust the traditionally niche market into the global spotlight, spurring a race for talent as trading houses, hedge funds and Wall Street banks all seek to grow their precious-metals businesses. While prices have retreated over the past week, they’re still more than 50% higher than at the start of the year.
“We’re delighted to see that there has been a series of banks who have been interested” in becoming clearing members, London Bullion Market Association chief executive officer Ruth Crowell told journalists at the group’s annual conference in Kyoto on Monday, declining to identify the interested banks.
The number of clearing banks who deal in the physical business of storing bars has shrunk in recent decades, with lenders including Rothschild & Co., Deutsche Bank AG, Bank of Nova Scotia and Barclays Plc all exiting since the start of the century. ICBC Standard Bank Plc was the last to be accepted as a clearing bank in 2016, when it purchased Barclays’s 2,000-ton capacity vault.
In addition to JPMorgan, HSBC Holdings Plc, UBS Group AG and ICBC Standard Bank Plc make up the four current clearing members of the London gold and silver markets. The Bank of England also provides storage, principally to other central banks.
London Precious Metals Clearing Ltd., the company owned by clearing members, earlier this month appointed an independent chair for the first time.
‘It should be open’
“The talk was always: ‘Is it a club which won’t let anybody else in?’ Well, having an independent chair facilitates that,” Paul Fisher, chairman of the LBMA, said in Kyoto. “We’ve certainly been saying for many years it should be open.”
Fisher added: “It’s not a zero-sum game: the more clearers you get, the bigger the market. It’s good for everyone.”
The market shifts over the past year have demonstrated the value that the scale and integration of being a clearing member of the London market can bring.
When the London gold market was squeezed earlier this year by a rush to ship metal to the US amid fears that President Donald Trump might impose import tariffs, queues to take gold out of the Bank of England ballooned and access to immediately-available gold in London was at a premium. Similarly, there was a massive squeeze in the silver market.
Banks with sizable wealth-management divisions also see an opportunity in being able to offer storage to their clients’ gold themselves, rather than having to send them to a rival, some of the people said.
Revenues from vaulting — which are typically calculated as a percentage of the value of the gold stored — have shot up as prices have soared about 55% since the start of the year.
Still, operating a vault — or outsourcing it to a specialist precious logistics company — is expensive, and carries no guarantee of a return.
“It is a big commitment in terms of investment,” Crowell said. Still, “assuming negotiations go well” there should be more clearing members within the next year, she said.
(By Jack Farchy, Sybilla Gross, Jack Ryan and Yihui Xie)
Gold trader hiring spree drives up pay as bullion booms
Trading houses, hedge funds and banks are on a hiring spree for specialist gold traders as interest in the metal soars, creating a battle for talent that is driving up pay packages in what has historically been a niche market.
Major commodity traders Trafigura Group and Gunvor Group have brought in teams of precious metals traders this year, while rivals IXM and Mercuria Energy Group Ltd. have also been looking to hire in the sector, according to people familiar with the matter. Numerous hedge funds, banks and industrial companies like refiners are also either trying to break into precious metals or expand their teams, headhunters and industry executives said.
While gold is a high-profile market, with the equivalent of hundreds of billions of dollars changing hands every week in the main hub of London, it has traditionally been dominated by a handful of banks such as JPMorgan Chase & Co., HSBC Holdings Plc and UBS Group AG, operating with lean teams of traders. As prices soared this year, new market participants seeking to break into the sector had only a small pool of experienced traders to draw on.
“Precious metals traders are having a bit of their moment in the sun,” said Alex Kerr, a commodities headhunter at Aurex Group. “It’s not just banks anymore. Hedge funds and trading houses are all looking for precious metals traders or portfolio managers.”
The talent war is a hot topic of conversation at the largest annual gathering of the precious metals industry, the London Bullion Market Association conference that began this weekend in Kyoto, Japan.
“Precious metals has been, for many years, seen as more on the fringe,” LBMA chief executive officer Ruth Crowell told the conference on Monday. “But I think given the growth in not just trading but client interest and participation, there certainly is a mainstream feeling and potentially a new chapter.”
In addition to soaring prices, precious metals markets have presented an array of opportunities for profit this year — from a massive arbitrage trade that drew tens of billions of dollars’ worth of metal into the US at the start of the year, to the dramatic silver squeeze gripping the London market this month.
The 12 leading banks collectively made $500 million from precious metals in the first quarter of 2025, the second-highest figure in a decade of data compiled by Crisil Coalition Greenwich. That’s approximately twice the average earnings per quarter over the past 10 years, the market intelligence firm’s data showed.
However, years of being a relatively neglected corner of many banks’ trading floors has hollowed out the pipeline of talent for traders and salespeople who understand not just the macro forces that buffet precious metal prices, but the practicalities of storing and moving metal.
“The talent pool is so small that it is a very thin market,” said Nicholas Snoek at commodities-focused headhunter HC Group. “Physical precious metals traders are in even shorter supply, given so much talent has retired in recent years and graduates are more focused on tech roles.”
Precious metals traders who previously only had a relatively small number of banks to choose between are now being courted by physical trading houses and hedge funds — which are also willing to pay more. Gold traders at physical houses can now get bonuses that were two to three times higher than what they would be paid at banks, according to Aurex’s Kerr.
“This is one of the first times precious metals traders are actually getting paid like other commodity traders,” he said.
Physical trading houses like Trafigura and IXM typically already trade some gold and silver as a byproduct of their activities in copper, lead and zinc ore, known as concentrates. But the push to hire specialist traders marks an expansion, with Trafigura hiring three precious metals traders earlier this year.
Gunvor is developing the full value chain from gold and silver concentrates to refined bars, said a spokesperson at the trading house, which is traditionally focused on energy but is now expanding in metals. It recently hired Mark Devine, who previously worked at Marex Group Plc and Macquarie Group Ltd., and has hired other traders from ICBC Standard Bank Plc, Anglo American Plc and StoneX Group Inc., the spokesperson said.
In addition to the demand from trading houses, hedge funds, refiners, brokers and banks are also hiring precious metals traders, leading to a huge turnover of jobs at both senior and junior levels.
Singaporean banks DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. are among those seeking to hire precious metals traders, while France’s Societe Generale SA has also been planning to expand its precious metals offering, according to people familiar with the matter.
An OCBC spokesperson confirmed that the bank plans to hire in precious metals, while a DBS spokesperson said it had seen “strong client demand” in the sector. A spokesperson for Societe Generale declined to comment.
“The people movements are the most I’ve seen during my career,” said Bruce Ikemizu, an industry veteran and chairman of the Japan Bullion Market Association. “There aren’t that many really experienced people; we don’t have young kids coming into this business.”
(By Jack Ryan, Yihui Xie and Jack Farchy)
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