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Goldman Sachs looks set to report higher commodities trading revenues

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(Kitco News) - U.S. investment bank Goldman Sachs has been taking advantage of the latest commodities boom as it reports stellar trading profits in the commodities trading arm of the business. IFR reported that the firm is on track to make around $1bn in commodities trading this quarter following dramatic swings in these markets, according to sources familiar with the matter.

It was said that the bank had already generated roughly $500m in commodities profits before Russia’s invasion of Ukraine in February amid a notable rise in client activity, the sources said.

It is not all good news as analytics firm Coalition Greenwich projects the top 12 investment banks will report a 7% decline in global markets revenues in the first quarter from a year ago. This is also due to the Russia/Ukraine conflict.

Michael Turner, head of competitor analytics at Coalition Greenwich “This is a significantly healthier markets environment for banks than before the pandemic,” adding “Although there might be some losses, the increased volatility means those will be offset by gains in other products. The largest banks with a broad offering should enjoy a portfolio effect.”.

Stocks have had a big decline with investors flooding to safe-haven assets like gold. Not only that markets like corn, oil, and palladium have skyrocketed as supply has been taken off the market. Russia has imposed a ban on exports of some of its raw goods and materials which has added to the supply deficit. 

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