Gold slumps as S&P 500 futures slide on metal rout

Gold suffered its sharpest one-day selloff in decades as heavy positioning in precious metals unwound violently. The S&P 500 turned sharply lower, with Wall Street futures under pressure and European equity futures also pointing down, while South Korean stocks led losses in Asia. Notably, gold and US Treasuries failed to attract safe-haven flows, raising concerns about confidence in US assets as risk appetite faded globally.

Equities

The FTSE 100 closed higher on Friday, rising 0.5% and securing its seventh consecutive monthly gain, the longest such run in more than 12 years. The index finished the session supported by strength in banking shares and a weaker pound, which traded lower against the US dollar late on Friday. The more domestically focused FTSE 250 ended the day broadly flat, though it still finished January in positive territory.

Among UK-listed companies, banks led gains. Lloyds Banking Group closed 3.3% higher on Friday, the strongest performer on the FTSE 100, as the sector extended weekly gains. Experian rose 2.3% by the close after announcing a new $1bn share buyback programme, adding support to the wider index. By contrast, precious metals miners ended sharply lower late on Friday, tracking the fall in gold prices, while industrial metal miners also closed down as commodity prices retreated.

In the US, equity markets ended the week lower as investors assessed President Donald Trump’s decision to nominate Kevin Warsh as the next Federal Reserve chair and reacted to fresh inflation data. The S&P 500 closed 0.43% lower on Friday, while the Dow Jones Industrial Average fell 0.36%. The Nasdaq Composite dropped 0.94%, weighed down by large technology stocks. The Russell 2000 fell 1.6% on the day, underperforming larger peers despite ending the month strongly.

Company moves were mixed. Apple closed 0.4% higher on Friday after earlier weakness, following the release of quarterly results and a forecast for stronger revenue growth, even as management flagged rising memory chip costs. Microsoft ended the session 0.7% lower after a sharp fall the previous day linked to softer cloud revenue. Meta Platforms closed down 3% late on Friday.

Elsewhere, Tesla shares rose 3.3% by the close after reports of potential commercial discussions involving SpaceX, providing the biggest single boost to the S&P 500. Verizon Communications jumped 11.8% on Friday after forecasting annual profit and free cash flow above expectations, citing strong subscriber growth during the holiday period. Colgate-Palmolive rose 5.9% after projecting annual sales ahead of forecasts on steady household demand.

Forex & Commodities

Currency markets were comparatively steady despite sharp moves across commodities, with the US dollar holding on to recent gains as investors assessed the implications of a Federal Reserve potentially led by Kevin Warsh. The dollar index was little changed at 97.21 in Asian trading, following a firm move higher at the end of last week. Against the euro, the dollar strengthened, with the single currency trading lower at 1.185, while sterling also edged down to 1.366 against the dollar during the same session.

Attention also remained on Japan, where the yen weakened to 154.8 per dollar after weekend comments from Prime Minister Sanae Takaichi appeared to play down concerns over currency weakness ahead of an expected strong election result for the ruling Liberal Democratic Party. The prospect of looser fiscal policy has weighed on Japanese government bonds and the yen, although traders remain alert to the risk of official intervention.

Gold prices fell sharply late on Monday and extended losses early this morning. Spot gold was trading at 4,677 per ounce after briefly touching a two-week low, having retreated from last week’s record high near 5,595. The sell-off followed heavy liquidation across precious metals as investors moved to meet margin calls, even as JPMorgan reiterated a longer-term forecast of 6,300 per ounce by the end of the year, citing sustained central bank demand. Silver also dropped back to 78.90 per ounce early today, retreating from recent highs as volatility persisted.

Oil prices moved decisively lower late on Monday, with Brent crude trading at 65.94 per barrel and US crude at 61.88. The decline followed comments from US President Donald Trump suggesting progress in talks with Iran, reducing fears of near-term supply disruption. OPEC+ confirmed at the weekend that output levels would remain unchanged for March.