FTSE 100 hits record high as ‘metals meltdown’ in gold and silver eases – business live | Business
FTSE 100 hits fresh record high as metal prices recover
Oof! Britain’s stock market has now shrugged off its earlier worries, and hit a new alltime high.
With the slump in metal prices easing, the FTSE 100 has bounded ahead to hit a fresh record peak of 10,298 points, up 0.7% today.
Mining companies have recovered most of their earlier losses, helped by a moderate recovery in precious metal prices after their tumble early this morning.
Key events
Capital Economics: rates may not fall as fast if Starmer or Reeves replaced
UK interest rates might be cut three times this year, analysts at Capital Economics suggests – unless Keir Starmer or Rachel Reeves are bundled out of Downing Street and replaced by a less fiscally-responsible PM or chancellor.
In a new note, their UK economist Alex Kerr says:
The data published since the start of the year suggest economic activity and price pressures have strengthened. But we still expect annual GDP growth to slow and the weak labour market to weigh on price pressures. This and the smaller rises in regulated prices this year than in 2025 mean we think CPI inflation will fall below the 2.0% target this year and stay there.
That will allow the Bank of England to cut interest rates from 3.75% now to 3.00% this year, rather than to 3.50% as investors anticipate. That said, if Starmer and/or Reeves were to be replaced by a top team in favour of higher public spending then interest rates may not fall as far.
Encouraging news from the US economy!
America’s factory sector picked up last month, according to two polls of manufacturing purchasing managers.
S&P Global’s PMI survey has found there was a “notable upturn in production” despite subdued sales growth in January. It found that production rose last month at the joint-fastest pace since May 2022.
A rival PMI survey from the Institute of Supply Management also shows that economic activity in the US manufacturing sector expanded in January for the first time in 12 months, with new orders and production growth both rising.
Britain’s FTSE 100 share index is putting on another spurt.
It’s now climbed over the 10,300-point mark for the first time, hitting 10,337 points – up over 1% today.
Wall Street opens flattish as dollar rallies
Ding ding goes the opening bell on the New York stock exchange, as Wall Street opens softly as the metals selloff eases.
The S&P 500 share index, which tracks five hundred US companies, is flat in early trading – shrugging off fears of a loss earlier today.
The Dow Jones industrial average has gained 0.25%, or 115 points, to 49,007.93.
And the US dollar is now up 0.55% as traders react to the prospect of Kevin Warsh running the Federal Reserve.
Enrique Diaz-Alvarez, chief economist at global financial services firm Ebury, suggests the bounce may have further to run:
“The appointment of Kevin Warsh as the next chair of the Federal Reserve seems to have helped stop the rot for the dollar.
“While Warsh has recently aligned himself with Trump in calling for a lower fed funds rate, the fact that he was previously seen as a hawk during his stint as a Fed governor in the late-noughties means that he is probably less likely to advocate for aggressive cuts than messrs Hassett and Reider.
“His appointment may also act to calm fears over Fed independence, given that he has been a vocal advocate of preserving central bank autonomy in the past. Of course, any pick by the president will be regarded as a Trump loyalist to some extent, but we certainly view the Warsh appointment as the lesser of three evils.
Good news – possibly – for chocolate lovers.
The wholesale price of cocoa has fallen around 5%, with Bloomberg reporting that cocoa futures are the lowest level since November 2023.
They report:
The most-active contract fell as much as 5.4% to trade below $4,000 before paring losses. Futures are down more than 30% this year on worries over demand destruction and the potential for a bigger-than-expected surplus.
If that’s passed onto consumers, then there could be relief for shoppers after chocolate prices surged last year:
Disney has beating forecasts in its latest financial results.
The entertainment company was helped by a strong quarter in its parks business, which pulled in record quarterly revenue of $10bn, with attendance at Disney’s domestic parks up 1% in the quarter, and per capita spending up 4%.
This helped Disney to post a 5% rise in total revenues to $26bn, and adjusted earnings per share of $1.63 for the quarter, topping forecasts for $1.56. But…. total operating income for the company dipped to $4.6bn, from $5.1bn a year ago.
Bob Iger, chief executive officer of The Walt Disney Company, says:
“We are pleased with the start to our fiscal year, and our achievements reflect the tremendous progress we’ve made.
We delivered strong box office performance in calendar year 2025 with billion-dollar hits like Zootopia 2 and Avatar: Fire and Ash, franchises that generate value across many of our businesses. As we continue to manage our company for the future, I am incredibly proud of all that we’ve accomplished over the past three years.”
One asset that isn’t recovering its earlier losses is oil, as fears of a US attack on Iran ease.
Brent crude is still down almost 5% today, currently trading at $65.95 a barrel.
Charalampos Pissouros, senior market analyst at Trading Point, says:
Oil prices opened with a negative gap today and slipped around 5% after the opening as US President Trump said over the weekend that Iran and Washington are in serious talks, which likely lessens the risk of the US proceeding with military action.
Gold and silver prices recovering as ‘metals meltdown’ eases
The meltdown in the metal market has eased, as City traders grab some lunch.
Gold, which was down almost 10% this morning, is now only down 1.6% today at $4,790 per ounce.
And silver, after a 15% tumble early on Monday, is also down just 1.4% now at $83 per ounce.
Traders may be recovering some confidence, after worries over the nomination of Kevin Warsh to run the US Federal Reserve hit markets.
David Morrison, senior market analyst at fintech and financial services provider Trade Nation, says:
Overall, there’s been quite an uptick in FX volatility of late. This suggests a relatively high level of uncertainty amongst investors. And this in turn could be a precursor to a major change in trend.
There are some mixed views concerning President Trump’s pick as the next Fed Chair, Kevin Warsh. Some look back at his past behaviour and insist that he’s a hawk. They point to when he was a Fed governor during the Great Financial Crisis and how he wanted to raise rates to stem inflationary pressures. But that was eight years ago, and the simple fact is that the President wouldn’t have picked Mr Warsh if he had a wildly different from him over monetary policy.
Mr Warsh will be happy to cut rates. But he is dead against quantitative easing. He also wants to make fundamental changes at the US central bank and boost transparency. All-in-all, he should be someone with whom the markets can deal quite happily.
FTSE 100 hits fresh record high as metal prices recover
Oof! Britain’s stock market has now shrugged off its earlier worries, and hit a new alltime high.
With the slump in metal prices easing, the FTSE 100 has bounded ahead to hit a fresh record peak of 10,298 points, up 0.7% today.
Mining companies have recovered most of their earlier losses, helped by a moderate recovery in precious metal prices after their tumble early this morning.
Deutsche Bank have crunched the data of how markets performed in January – and spotted a surprising feature.
Despite an array of risks around Venezuela, Iran, Greenland and Fed independence, nearly every major asset was still in positive territory, when measures in US dollars anyway.
Silver led the way, followed by oil and then gold.
Bitcoin, and the dollar itself, were rare stragglers last month.
Deutsche Bank say:
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Equities did well across the board, as positive data surprises continued to power risk assets. Indeed, the ISM services index hit a 14-month high, whilst the US jobs report showed unemployment ticking lower. In turn, the S&P 500 (+1.4% in total return terms) briefly poked above 7,000 for the first time, whilst the MSCI EM index (+8.9%) had its best monthly performance since November 2022.
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Most notably, it was a historic and extraordinary month for precious metals, even with the late pullback. In fact, gold (+13.3%) saw its best monthly performance since September 1999, and silver (+18.9%) posted a 9th consecutive monthly gain.
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Other commodities did very well, and the geopolitical risk pushed Brent crude oil (+16.2%) to $70.69/bbl, marking its biggest monthly jump in four years.
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Bitcoin was one of the few major assets to end the month lower, down -10.8% to $78,197. That’s a 4th consecutive monthly decline for Bitcoin, which hasn’t happened since before the pandemic.
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The US Dollar also struggled, particularly after Trump was asked about the decline, and he said “No, I think it’s great”. So the US Dollar weakened against every other G10 currency, and the dollar index also saw its worst 4-day slide since the Liberation Day turmoil last April.
The turmoil in the precious metals market has left traders in China nursing losses, with one dealer reportedly fleeing the country.
Bloomberg are reporting that Chinese metals traders have racked up losses totaling at least 1 billion yuan (£105m), and that Xu Maohua, a metals dealer known as “The Hat” has scarpered.
At the heart of the crisis is a trading network facilitated by Xu Maohua, a metals dealer nicknamed The Hat, said the people, including some who worked with or did business with him and are directly affected by the losses. State-backed SDIC Commodities Co. was the highest-profile participant, they added, asking not to be named given the sensitivity of the matter.
Xu owed money to the company for shipments of copper and other metals, and it in turn owed money to its suppliers, the people said. The fallout includes one lawsuit against SDIC Commodities filed for over 200 million yuan in damages and bills that the plaintiff claims have gone unpaid, according to an exchange filing from a company involved. The firm has not publicly responded.
Exclusive: Metals traders face at least 1 billion yuan ($144 million) of losses after a dealer known as ‘The Hat’ fled China, alarming top regulators https://t.co/aW6kAQUH8h
— Bloomberg (@business) February 2, 2026
Waitrose: Damp January is the new Dry January
Julia Kollewe
Waitrose have reported that Dry January was not so dry after all, my colleague Julia Kollewe writes.
“Move over Blue Monday, it’s all about ‘Damp Monday’,” quipped the upmarket grocer, which is part of the John Lewis Partnership.
This year, the January slump ended early on Monday 12 January, when shoppers started adding more wines, beers and spirits back into their baskets, with sales up 11% compared to the week before.
Waitrose said it was seeing a significant softening of the Dry January trend. In January 2022, alcohol sales were 42% lower on average than the other months of the year, while this January, the reduction was much smaller, around 25%.
The company sold 25% more Argentinian wine and 27% more Chilean wine compared to this time last year.
While 58% of the UK public intended to cut back on booze, roughly 31% opted for a “Damp January” – reducing intake rather than cutting it out entirely, Waitrose said, citing figures from trade mag The Spirits Business.
Pierpaolo Petrassi, head of beers, wines & spirit at Waitrose, said:
“Damp is the new dry, as we’re seeing customers move away from the ‘all-or-nothing’ mentality and instead look towards more mindful, ‘damp’ moderation rather than quit entirely.
“No doubt the no and low trend skyrocketed in 2022 as the result of the ‘pandemic reset’ transitioning out of the final lockdowns, as well as the ‘sober curious’ movement going mainstream on social media. Now, 2026 is the ‘lifestyle’ year, with customers finding balance as part of a more tempered, year-round approach to drinking.”
The “pullback” in the gold price today looks more like a liquidity event than a change in the long-term case for holding bullion, argues John Wyn-Evans, head of market analysis at Rathbones.
Wyn-Evans says the sharp reversal in gold’s momentum was helped along by President Trump’s decision to nominate Kevin Warsh as the next Fed chair on Friday, which prompted a rise in the US dollar.
He writes:
“Not for the first time in recent market history, we’re witnessing a spectacular unwinding of leveraged positions, this time in precious metals.
“The sharp pullback in gold looks more like a liquidity and positioning event than a change in the long‑term case for the asset. After a powerful run‑up driven by momentum strategies, short squeezes and leveraged buying, that same positioning has unwound rapidly, amplifying downside moves. Reports of unsettled trades in parts of the metals market have added to near‑term pressure, but, in our view, this reflects stress among specific market participants rather than systemic weakness across precious metals.
The FTSE 100 is benefitting from its holding of ‘defensive’ companies today.
Unilever (2%), catering firm Compass (+1.9%), and insurers Beazley (+2.7%) and Aviva (+2.1%) are all in the top risers.
FTSE 100 now up on the day
The UK’s main stock market index has now pushed higher, helped by the minor recovery in gold and silver off their lows.
The FTSE 100 is now up 29 points or 0.28% at 10,252 points.
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