The FTSE 100 closed at a fresh record high on a day of whipsawing global markets, as a strengthening US dollar offset sharp falls in commodities including gold, silver and oil.
London’s blue-chip index finished up 118.02 points, or 1.15 per cent, at 10,341.56, reversing an early European sell-off and setting a new closing peak. Traders bet that the dollar’s recent rally would boost earnings prospects for UK-listed multinationals, around three-quarters of which generate revenues in dollars.
The session was marked by heavy volatility across asset classes:
Gold prices fell a further 1.9 per cent to $4,648.76 an ounce, their lowest closing level since mid-January and more than 13 per cent below last week’s record high. Silver, which had surged earlier this year, also slid 1.9 per cent to $76.78 an ounce, leaving it down more than a third from its recent peak.
Oil prices suffered their worst daily drop in months. Brent crude fell 4.4 per cent to $66.08 a barrel, its sharpest decline since June last year, after Donald Trump signalled a possible easing of tensions with Iran, an Opec member. Despite the fall, Brent remains around 9 per cent higher since the start of the year.
In digital assets, bitcoin rose 1.8 per cent to $78,282 but remains more than 30 per cent below its record intraday high set in October.
The renewed pressure on precious metals began late last week after Trump named Kevin Warsh as his preferred successor to Jerome Powell as chair of the Federal Reserve, when Powell’s term ends in May.
Warsh is seen by markets as more likely to resist political pressure to slash interest rates aggressively, easing concerns over the long-term credibility of US monetary policy and denting demand for traditional safe-haven assets such as gold.
Despite the sharp correction, many analysts argue the sell-off in precious metals may have gone too far. Analysts at Jefferies said the longer-term backdrop still favours commodities, citing continued investor and central-bank interest in real assets amid global macroeconomic uncertainty.
Meanwhile, UBS, which has forecast gold could reach $6,200 an ounce this year, said the market appears to be in the “mid-to-late stage” of its current bull run, with intermittent pullbacks of 5–8 per cent to be expected.
The dollar index, which tracks the US currency against a basket including the euro and yen, rose nearly 0.5 per cent on the day and is up 1.6 per cent over the past week — a move that has helped underpin the FTSE 100’s record-breaking performance, even as commodity markets cool.
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FTSE 100 hits record high as dollar rallies and gold extends sharp pullback