(qlmbusinessnews.com . Tue 3rd Feb, 2026) London, UK —
FTSE 100 Hits New Highs as Precious Metals Rally Faces Major Setback
Gold and Silver Prices Tumble, Eroding Precious Metals Rally
Gold and silver markets in the UK have seen their prices plummet, undoing the substantial gains that earlier drove these precious metals to unprecedented levels.
Record highs were witnessed in January when geopolitical uncertainties prompted investors to seek refuge in assets perceived as safe. Nonetheless, the nomination of Kevin Warsh to head the US Federal Reserve saw a significant retraction in metal prices.
Friday saw spot gold experience its most severe one-day decline since 1983, plunging over 9%, while silver witnessed a 27% drop, albeit with a slight recovery by Monday.
Meanwhile, the pound sterling advanced, and the FTSE 100 overcame an initial dip to reach new record highs, closing up 1.2% at 10,341.56 points, and even hitting an intra-day peak of 10,345.48.
By Monday 17:00 GMT, the price of gold had decreased by 4.6% to $4,659.16 per ounce, and silver plummeted by 7.63% to $78.70, leaving both metals considerably below their recent highs of over $5,500 and $120.
Alterations in trade requirement costs on a major trading platform, which raised the expenses for speculative trading, have further pressured metal prices downward.
Russ Mould, investment director at AJ Bell, reflected on the volatility, “Many investors sought gold and silver for a hedge against geopolitical uncertainty, only to realise these assets themselves harbour volatility.”
Market sentiments also shifted regarding the US Federal Reserve's independence, but the appointment of former central bank governor Warsh has been largely positively received, even boosting the US dollar's value by 1%.
This move also quelled fears about potential undermining of the Fed's autonomy, following critiques aimed at Jerome Powell for his cautious rate-cutting approach.
Even after the steep price drops, gold's value has merely regressed to its position a few weeks earlier and still stands approximately 70% higher than the previous year.
Monday saw a broader commodities sell-off, with Asian stock markets, particularly South Korea's Kospi, taking a hit. European indexes initially stumbled, with the FTSE 100 later rebounding, despite pressures facing mining firms.
In the US, stock markets displayed resilience with modest improvements, while global energy markets saw crude oil prices decrease by nearly 5%, influenced by steady output levels and easing US-Iran tensions, amidst a strengthening US dollar.
2025 was a landmark year for precious metals, especially gold, marking its biggest gain since 1979, partly attributed to its scarcity with only about 216,265 tonnes ever mined.
Bitcoin's Descent
The cryptocurrency scene also faced turmoil, with Bitcoin falling below $75,000 after a previous drop, as legislative progress on cryptocurrencies stalled in the US.
The re-election of Trump in November 2024 initially buoyed digital currencies, given his supportive stance. However, the sector has seen a reversal to pre-election values amid a broader sell-off of volatile assets and regulatory uncertainties.
Recent developments have reignited concerns over possible conflicts of interest, especially given Trump's ventures in the crypto space since taking office, including the launch of his cryptocurrency, $TRUMP, which has now lost about 90% of its peak value.
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