Gold, Oil Up as Syrian Regime Collapses, Aviva Acquires Direct Line

Gold prices rose 0.4% as markets absorbed the overthrow of Syrian President Bashar al-Assad, marking a significant geopolitical shift. South Korea’s won slid towards two-year lows and its stocks dropped over 2% following political turbulence linked to President Yoon Suk Yeol’s impeachment and a subsequent investigation. The euro remained under pressure, holding above parity with the US dollar, as markets awaited central bank decisions this week, including expected rate cuts by the ECB, BoC, and SNB.

Equities

The FTSE 100 slipped 0.5% on Friday, marking its largest daily drop in three weeks, with declines led by precious metals, mining, and utilities stocks. Direct Line popped 5.6% following Aviva's agreement to acquire the insurer in a £3.61 billion cash-and-stock deal, positioning Aviva as the UK's largest home and motor insurer. Aviva shares fell 1.2% on the announcement.

Serco Group dropped 5.1% after UBS downgraded the stock to "sell" from "buy," while Frasers Group slid 3.6% following its opposition to Norwegian retailer XXL ASA’s share issuance plan. Meanwhile, house prices in Britain rose by 1.3% in November, providing a lift to the construction and materials sector, which gained 1%.

In the US, the S&P 500 rose 0.25%, and the Nasdaq advanced 0.8%, driven by positive corporate updates. Lululemon Athletica and Ulta Beauty delivered upbeat forecasts, boosting investor sentiment. However, the Dow fell slightly, weighed down by a 5% drop in UnitedHealth Group shares following the shock killing of its CEO.

Treasury yields hit a six-week low, with the benchmark 10-year note yield down to 4.15% and the 2-year note yield at 4.09%, reflecting expectations of a Federal Reserve interest rate cut later this month.

Bitcoin crossed the $100,000 mark for the first time, gaining 2.3% on the day to trade around $101,300 after some sharp initial profit-taking. The move followed optimism surrounding potential regulatory shifts, underscored by US President-elect Donald Trump’s appointment of former PayPal COO David Sacks as “White House AI & Crypto Czar.”

Forex & Commodities

The US dollar strengthened against the euro, with the euro down 0.27% to $1.0537, extending losses as political turmoil continues in France. The Canadian dollar hovered near a 4.5-year low ahead of the Bank of Canada’s meeting, where a significant interest rate cut is anticipated. Meanwhile, the Australian dollar traded at $0.6383, near a four-month low, as markets await the Reserve Bank of Australia's policy update, though no immediate rate cut is expected.

Gold prices rose 0.5% to $2,646.69 per ounce, supported by news that Bashar al-Assad had fled Syria, handing control of the country to rebels. Central bank buying is also supporting metal prices with China’s central bank resuming its gold purchases in November after a six-month pause. The People’s Bank of China’s return to gold buying boosted sentiment, helping gold maintain its nearly 28% annual gain. Spot silver climbed 0.8% to $31.22 per ounce, while platinum and palladium added 1.1% and 1.5%, respectively.

Oil prices gained slightly as Brent crude rose 0.51% to $71.48 per barrel, and US West Texas Intermediate crude increased 0.55% to $67.57 per barrel. The fall of Syrian President Bashar al-Assad added to geopolitical uncertainty, though weak demand from China continues to weigh on the market. Saudi Arabia announced reduced crude prices for Asian buyers, reaching their lowest level since 2021, while OPEC+ extended production cuts through 2026 in response to slowing global demand.