00:00Is this surge in hiring then all down to the surge in gold prices?
00:06Yeah, partly.
00:07I mean, it's been an unprecedented year in gold and all of the other precious metals, really.
00:12And, you know, you talk, well, I've been speaking to traders and they've been telling me they've been seeing unprecedented demand from clients.
00:19You know, like new clients have never really dealt with before, including large corporations and multiple family offices.
00:26And he said just the level of that, well, one of the traders I spoke with the other day said it's just far from normal.
00:32But on the other hand, what the trading houses and hedge funds are really looking to exploit, I think, in the current market is the fact that we've seen huge price dislocations on several occasions this year between key trading hubs, which opens up very lucrative arbitrage opportunities.
00:51Obviously, beginning of the year, traders were very worried that precious metals would be hit with U.S. tariffs.
00:59Some of those fears are still in the market for silver, platinum and palladium.
01:03But basically what we're seeing is huge arbitrage opportunities open up.
01:07And that's why all of these big physical trading houses and the hedge funds want to come in and exploit those opportunities.
01:13So how easy or difficult is it then to hire gold traders?
01:17I mean, I guess historically, it's it's the market's been really dominated by a small handful of banks, probably the two most well-known ones, the JP Morgan and HSBC.
01:29I think in previous years, you know, I've been talking to traders who've, you know, been in the market a long time and they've kind of expressed sort of sentiments along the lines of banks have sort of stepped away from the market or under invested in their team.
01:46So effectively, what we're looking at today is a lot of these banks have been operating with quite lean teams.
01:53And that's left us with a not very deep pool of talent.
01:57Now that prices have soared this year, as you rightly pointed out at the beginning, you know, new participants want to take opportunities to break into the sector, but there aren't that many people to draw upon.
02:08So to give you a sense of how much the backdrop really has changed, my colleague, Jack Ryan, wrote in a story earlier this month, you know, an average of nearly $600 billion worth of spot gold has been traded each week in London in recent months.
02:24That's more than a threefold increase since 2021.
02:27The other point I would just make is, you know, what the physical trading houses and hedge funds really want are people who understand the macro forces that, you know, really steer what's happening in precious metals prices, but also just the practicalities of moving the metal around, because that's really where probably the biggest opportunity is, like exploiting those arbitrage windows.
02:52So for those people who are already in this area and skilled, are they rubbing their hands with glee?
02:59What does it mean in terms of the sort of incentives that they can attract in this area?
03:05Yeah, that's a great question.
03:07A lot of the traders I've spoken to have been saying, you know, they're being hit up on a weekly or, you know, monthly basis, even from other participants in the market who are keen to poach them.
03:19So I guess, you know, the world's their oyster.
03:21They've got a lot of opportunities.
03:23I guess the most obvious incentive here is, you know, bonuses.
03:29Trading houses and hedge funds are more willing to pay more.
03:33One of my colleagues spoke with a commodities hedge, headhunter, and, you know, he mentioned that basically physical trading houses can get bonuses that are two to three times higher than banks.
03:45So you're seeing a huge amount of turnover at all sorts of levels.
03:50And yeah, I guess traders can move around if they don't feel like they're being properly incentivized for compensation or internal politics, etc.
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