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Josh Crumb: Global Commodity Outlook & Building ABAXX

Value Hive Podcast

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The Shift from Risk to Physical Markets

Banks have significantly reduced their risk exposure in commodity trading, choosing to only match risks and minimize balance sheet volatility. This change in market structure has diminished the reflexive feedback that once characterized the market dynamics. Additionally, the traditional LBMA gold trading centered around 400-ounce bars is shifting toward an Asian-focused market that favors kilogram bars. This evolution includes the launch of a new gold pool that consolidates kilo bar trading with a futures market aligned to spot prices, enhancing the trading framework for physical commodities, particularly in key consumer markets like India and China.

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