FTSE 100 soars to fresh high despite metal price rout: Gold falls another 9% while silver crashes 16%
The FTSE 100 soared to a record high above 10,300 yesterday despite a wild session on commodities markets that saw gold and silver prices slump.
London’s leading stock index ended up 1.2 per cent, or 118.02 points, at 10,341.56 even as UK-listed precious metal miners and oil giants slid thanks to the commodities downturn.
The FTSE benefited from big pharma and consumer goods groups as gold and silver, traditionally seen as safe havens, experienced wild swings more usually associated with racy investments such as bitcoin.
Their prices wilted in the face of a recovering US dollar as markets continued to adjust to Donald Trump’s nomination of Kevin Warsh to lead the US Federal Reserve.
Chris Beauchamp, chief market analyst at IG, said the London index’s record showed the FTSE 100 was ‘clearly the safe haven at present’.
Among the risers were AstraZeneca, which climbed 3.2 per cent, and rival drugs giant GSK, which gained 2.6 per cent.
Ups and downs: The FTSE 100 ended up 1.2%, or 118.02 points, at 10,341.56 even as UK-listed precious metal miners and oil giants slid thanks to the commodities downturn
Also climbing were consumer goods giants Unilever, up 1 per cent, and Reckitt, rising by 1.4 per cent.
That was enough to offset falls from UK-listed Mexican gold and silver miner Fresnillo, down 0.9 per cent, and Endeavour Mining, which fell 2.7 per cent.
With oil prices falling too, BP dropped 0.4 per cent and Shell slid 0.5 per cent.
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But it was the stunning swings for gold and silver that grabbed attention. Gold had fallen by nearly 10 per cent on Friday in its biggest one-day slump since 1983 while silver had plummeted by a record 27 per cent.
The dramatic declines continued when markets opened yesterday, with gold down more than 9 per cent to around $4,400 per ounce.
That left it 21 per cent down from its record high of just under $5,600 just two trading days earlier.
Silver tumbled as much as 16 per cent yesterday to nearly $71, down 41 per cent from more than $121 last Thursday.
Both clawed back some of the day’s decline later, but the moves still illustrated how erratic they have become.
Neil Wilson, investor strategist at Saxo, said: ‘Things just go too frothy – this was like crypto markets at their worst.’
Gold and silver have been buoyed up over the past year by the ‘sell America’ trade that has weighed on the dollar thanks to Trump’s unpredictable approach to foreign policy and tariffs as well as the Fed.
Trump has piled relentless pressure on Fed chief Jerome Powell to slash interest rates and many had expected him to pick a loyalist to replace Powell when his term runs out later this year.
But Warsh is seen as a credible candidate more likely than others to stand up to the President.
Russ Mould, investment director at investment platform AJ Bell, said: ‘Many investors bought gold and silver as protection against the volatile geopolitical backdrop, yet they’ve learned the hard way these assets can also be volatile themselves.’
Oil dives on Trump Tehran talks
Oil prices fell back towards $65 a barrel as hopes grew that US military action against Iran may be avoided.
Brent crude, which hit a six‑month high near $72 last week, fell to $65.45 after Donald Trump said Tehran was ‘seriously talking’ with Washington.
Analysts have warned that military conflict could hit Iranian output and shut the Strait of Hormuz.
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