Commodity Traders at Goldman Sachs (GS), Other Wall Street Firms, End Worst Year Since 2019

It’s been a bad year on Wall Street for commodity traders.

While stocks are at record highs, commodity traders are finishing their worst year since before the Covid-19 pandemic struck in 2020 as volatility subsides and prices rise in several categories. Wall Street firms and brokerages, including Goldman Sachs (GS) and JPMorgan Chase (JPM), expect combined annual revenues from commodities trading this year of $10.6 billion.

That’s nearly 20% below last year’s total, according to data from Coalition Greenwich, one of the top data providers when it comes to commodities such as gold, oil, and orange juice. The decline is due largely to the fact that turbulence in commodities markets has subsided after years of volatility caused by Covid-19 and Russia’s invasion of Ukraine.

Commodities Boom Fades

In a year-end report, Coalition Greenwich said that the commodities trading boom is fading and forecasts a further revenue decline of 3% in 2025. While some commodity prices such as crude oil and gold have either stabilized or risen to record highs, pockets of volatility remain for commodities such as cocoa and coffee beans.

However, most of the volatility today is in agriculture commodities and due to poor crops and harvests caused by climate change, said Coalition Greenwich. In recent years, Wall Street banks and brokerages have beefed up their commodity trading floors to take advantage of price volatility. Coalition Greenwich said the banks might need to reconsider that strategy moving forward.

GS stock has gained 57% this year.

Is GS Stock a Buy?

The stock of Goldman Sachs has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 12 Buy, 4 Hold, and no Sell recommendations issued in the last three months. The average GS price target of $610.80 implies 3.18% upside from current levels.

Read more analyst ratings on GS stock