Banking giant JPMorgan (JPM) is set to deliver gold (XAU-USD) bullion worth over $4 billion against futures contracts in New York this February. This move comes amid surging gold prices and concerns over potential import tariffs, which have triggered a global rush to ship metal to the U.S. The bank’s decision is part of a larger trend that has seen several institutions announce plans to deliver bullion against expiring contracts on CME Group’s Comex.
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The total delivery notices amount to 30 million troy ounces of gold, which is the second-largest ever recorded. Interestingly, tariff fears on imports have driven up gold futures prices on the Comex to the point where they surpassed the spot prices in London. As a result, this has created an arbitrage opportunity (risk-free profit) for a select few banks that can transport gold bullion between major trading hubs by buying in London and selling on the Comex.
In addition, similar situations have emerged with other Comex contracts, which have prompted traders to fly silver into the country. It is worth mentioning that this is a rare occurrence due to the metal’s bulk and low value. It is also worth noting that JPMorgan’s delivery notices account for roughly half of the total, with other major banks like Deutsche Bank (DB) and Goldman Sachs (GS) making up the rest.
What Is the Target Price for JPM?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on JPM stock based on 12 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 58% rally in its share price over the past year, the average JPM price target of $269 per share implies that shares are trading at fair value.
