Company News

Canada's CIBC lost $64 million in a day in gold market turmoil

LONDON, May 28 (Reuters) - Canadian Imperial Bank of Commerce (CIBC) took a trading loss of C$88.2 million ($64 million) in one day in March due mainly to volatility in the gold market, the bank said in its second-quarter earnings report on Thursday.

CIBC is not alone in being caught out when the coronavirus outbreak interrupted gold supply routes and gold futures prices in New York shot above London spot prices.

HSBC said earlier this month it suffered paper losses of about $200 million on one day in March.

CIBC said the loss happened on March 24 and was “mostly attributable to our precious metals trading business”. It was by far the biggest trading loss of any day since at last May last year, it’s report showed.

Gold trading banks plan to reduce their gold futures positions significantly on CME Group’s Comex exchange in New York because they fear further price volatility, Reuters reported on Thursday.

A reduction of activity by banks on Comex, the world’s largest gold futures market, would increase the relative importance of London as a trading centre and raise costs for thousands of gold investors who use the exchange.

$1 = 1.3775 Canadian dollars Reporting by Peter Hobson; Editing by Dan Grebler