The precious metals sector of the commodities market posted a gain over the third quarter of 2020, with all members of the sector posting impressive gains. The sector has moved over 17% higher over the first nine months of 2020.

The composite of the four precious metals that trade on the COMEX and NYMEX divisions of the CME dropped by 5.44% in Q1 2020. In Q2, it gained 11.52%. In Q3, it vaulted 14.30% to the upside and was 17.46% higher over the first nine months of this year.

In Q1, the outbreak of coronavirus and the upcoming US election caused volatility in markets across all asset classes. During the final week of February, risk-off conditions caused central banks around the world to ease, which continued to support the price of gold. In March, the US central bank lowered the Fed Funds rate to zero percent and launched bazookas of liquidity in the form of quantitative easing into the financial system. Throughout Q2, the Fed unleashed an unprecedented quantitative easing program that included both government and corporate debt issues. The US Treasury borrowed $530 billion from June through September 2008 in the aftermath of the global financial crisis. In May 2020, the Treasury borrowed $3 trillion, and more borrowing is likely on the horizon over the coming months.

Global interest rates are at record low levels. In Europe, the ECB lowered its deposit rate by ten basis points in September. The central bank also began quantitative easing to the tune of 20 billion euros per month in November. As the virus took a took on Europe, the ECB unleashed an accommodative bazooka on the financial system. Sluggish economic growth in Europe put the ECB on a dovish path when it comes to monetary policy before the outbreak of COVID0-19.

US

(RTTNews) – JPMorgan Chase & Co (JPM) agreed to pay a total of $920 million in penalty to settle U.S. investigations into the company’s alleged manipulation of metal and treasuries markets.

The settlement resolves investigations from the U.S. Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The U.S. regulatory authorities investigated the firm for unfairly manipulating or “spoofing” the precious metals market.

The charges against JPMorgan and its subsidiaries were for “manipulative and deceptive conduct and spoofing that spanned at least eight years and involved hundreds of thousands of spoof orders in precious metals and U.S. Treasury futures contracts.”

“The conduct of the individuals referenced in today’s resolutions is unacceptable and they are no longer with the firm,” said Daniel Pinto, co-President of JPMorgan Chase and CEO of the Corporate & Investment Bank.

J.P. Morgan Securities admitted the findings in the SEC’s order, and agreed to pay disgorgement of $10 million and a civil penalty of $25 million, the SEC said in a statement.

Of the $920 million settlement, JPMorgan will pay $436.43 million in criminal monetary penalty, $311.74 million in restitution, and $172.03 million in disgorgement.

As per the settlement, JPMorgan has entered into a deferred prosecution agreement with the Justice Department. The agreement will expire after three years so long as the firm and its subsidiaries, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC, fully comply with their respective obligations under the agreement.

Last year the Commodity Futures and Trading Commission fined Merrill Lynch Commodities $25 million.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source Article

JPMorgan Chase & Co JPM.N has agreed to pay more than $920 million and admitted to wrongdoing to settle federal U.S. market manipulation probes into its trading of metals futures and Treasury securities, the U.S. authorities said on Tuesday.

The landmark multi-agency settlement lifts a regulatory shadow that has hung over the bank for several years and marks a signature victory for the government’s efforts to clamp down on illegal trading in the futures and precious metals market.

JPMorgan will pay $436.4 million in fines, $311.7 million in restitution and more than $172 million in disgorgement, the Commodity Futures Trading Commission (CFTC) said on Tuesday, the biggest-ever settlement imposed by the derivatives regulator.

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Between 2008 and 2016, JPMorgan engaged in a pattern of manipulation in the precious metals futures and U.S. Treasury futures market, the CFTC said. Traders would place orders on one side of the market which they never intended to execute, to create a false impression of buy or sell interest that would raise or depress prices, according to the settlement.

This manipulative practice, which is designed to create the illusion of demand, or lack thereof, is known as “spoofing.”

Some of the trades were made on JPMorgan’s own account, while on occasions traders manipulated the market to facilitate trades by hedge fund clients, the CFTC said. The bank failed to identify, investigate, and stop the behavior, even after a new surveillance system flagged issues in 2014, the agency said.

“The conduct of the individuals referenced in today’s resolutions is unacceptable and they are no longer with the firm,” said Daniel Pinto, co-president of JPMorgan and CEO of