FTSE 100 slips as gold loses momentum and defence stocks retreat
The FTSE 100 gave back some of Friday’s gains as gold prices cooled and easing geopolitical tensions in the Middle East dampened demand for defence stocks. By mid-morning, London’s blue-chip index was hovering around 9,498, down modestly as miners and energy shares weighed on sentiment.
Gold’s pullback ripples through the market
Gold had surged in recent sessions, but the price retreated to about $3,965 per ounce, taking some wind out of the sails for mining stocks. The retreat followed a period when bullion benefited from safe-haven demand amid heightened geopolitical risk. As gold miners led the fall, investors began to reassess the outlook for equities tied to precious metals and energy demand.
Defence stocks ease as tensions ease
Defence names, including BAE Systems and Rolls-Royce, came under pressure, falling roughly 2.5%. Analysts attributed the move to easing tensions in the Middle East and talk of a potential Gaza ceasefire, which reduces the immediate need for defence-related investment and risk premiums. The same dynamics also weighed on oil shares as Brent crude cooled, trading around $64.81 a barrel.
Investors trade on a cautious Friday
As markets drifted, some sectors remained resilient. For instance, consumer stocks and utilities offered modest support, while miners faced profit-taking pressures after a strong run year-to-date. The FTSE 100 stood at 9,498.70 in late morning trading, down about 11 points from the open.
Context from the global markets
European peers gave mixed signals. Frankfurt’s DAX edged higher, while Paris’s CAC 40 posted a modest gain. Across the Atlantic, Wall Street struggled as the government shutdown continued, with traders awaiting the second wave of earnings from major banks next week. Market watchers highlighted the potential implications for deal-making fees, trading income, and consumer borrowing in a rising-rate environment.
US banks on deck for earnings season
With the calendar turning to a busy earnings week, big U.S. banks were in focus for signs of whether deal-making activity and investment banking fees have sustained their momentum. Analysts were watching for guidance on trading income amid volatility, consumer lending health, and any uptick in bad loans that could signal deteriorating conditions.
What to watch next
Traders will be mindful of further moves in gold and currency markets, as well as policy signals from upcoming UK data and the Budget. The balance between safe-haven assets and cyclical sectors—especially miners and energy—will likely dictate the near-term trajectory of the FTSE 100. Investors are also keeping an eye on any escalation in Middle East tensions that could reverse today’s cautious tone.
Bottom line
Friday’s session paints a picture of a cautious market, where gold’s strength has faded, defence stocks have softened on geopolitical easing, and the FTSE 100 continues to navigate a delicate balance between defensive safety and growth-oriented exposure.
