Commodities trading exposures have been going up on Wall Street, following Russia’s invasion of Ukraine, which may leave banking firms vulnerable to large swings in asset values, according to an April 18 story from Reuters.
Goldman Sachs Group (GSG) and JPMorgan Chase have both reported a rise in commodities trading risk measures, according to their first-quarter earnings disclosures, with GSG reporting its highest uptick in a decade.
The global markets for fuel, grain, and precious metals markets have grown more volatile since the West and Japan imposed sanctions on Russia, restricting its trade and exports.
Last month, the London Metal Exchange (LME) suspended nickel trading after prices doubled to more than $100,000 per tonne, after China’s Tsingshan Holding Group, one of the world’s top metals producers, caused a major price surge after it lost billions trying to cover its massive short position in nickel futures.
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