Gold Retreats Below $5,000. US Closed For Presidents’ Day

The S&P 500 closed marginally higher on Friday while the Nasdaq fell, with Nvidia and Apple weighing on the index. The FTSE 100 added to weekly gains, though NatWest slipped despite higher annual profit and new performance targets. The yen eased to 153.2 per dollar after last week’s surge, while sterling traded at 1.364. Gold fell back under $5000 per ounce early Monday, and Brent crude held around $67 per barrel ahead of US-Iran talks.

Equities

The FTSE 100 rose 0.4% on Friday, closing just below the record highs reached on Thursday and securing a third consecutive week of gains. The FTSE 250 added 0.5% on the day, marking its first weekly advance in three weeks. Sentiment was supported by takeover activity and expectations that the Bank of England could lower interest rates in March, with markets pricing in a 63.4% chance of a 25 basis point cut.

NatWest closed 2.5% lower on Friday despite reporting a 24% rise in annual profit, slightly ahead of forecasts. Management also set more ambitious performance targets as the bank increased investment in its wealth management division, including plans to acquire Evelyn Partners.

Defence stocks rose 3.1% after reports that Prime Minister Keir Starmer intends to promote a multinational defence initiative at the Munich Security Conference. Experian, London Stock Exchange Group and RELX, which had been under pressure during the recent global technology sell-off, rebounded during Friday’s session. Earlier in the week, Schroders was in focus following a U.S. buyout approach, adding to a run of merger activity across the sector.

In the United States, the S&P 500 closed 0.05% higher on Friday, while the Dow Jones Industrial Average rose 0.10%. The Nasdaq Composite fell 0.22%, dragged lower by heavyweight technology and communications stocks. For the week, the S&P 500 declined 1.39%, the Nasdaq fell 2.1% and the Dow lost 1.23%, their largest weekly drops since November.

Applied Materials closed 8.1% higher on Friday after forecasting second-quarter revenue and profit above Wall Street expectations. Arista Networks gained 4.8% after projecting annual revenue ahead of estimates. By contrast, Nvidia and Apple weighed on the S&P 500.

Forex & Commodities

The Japanese yen edged lower early on Monday to 153.2 per dollar after posting its strongest weekly gain in 15 months. The move followed last week’s election victory for Prime Minister Sanae Takaichi’s Liberal Democratic Party.

Investors are watching Monday’s meeting between Bank of Japan Governor Kazuo Ueda and Takaichi, with Japan’s latest data showing the economy grew at an annualised 0.2% last quarter. The Bank of Japan next meets in March, with markets assigning low odds to an immediate rate rise after December’s increase to 0.75%.

The US dollar index was little changed at 96.97 early on Monday, holding near levels seen after softer US inflation data on Friday. January’s consumer price index rose 0.2%, below expectations, prompting markets to increase bets on Federal Reserve rate cuts later this year. The euro traded at 1.186 against the dollar, while sterling eased to 1.364. US Treasury yields fell on Friday, with the two-year yield closing at its lowest level since 2022.

In commodities, spot gold fell early on Monday to 4,998 per ounce after rising sharply on Friday following the US inflation release. Thin trading conditions, with US and Chinese markets closed for holidays, contributed to the pullback. Silver declined to 76.82 per ounce.

Oil prices were steady early on Monday. Brent crude traded at 67.72 per barrel and US West Texas Intermediate at 62.86. Traders are focused on planned US-Iran talks in Geneva on Tuesday and reports that OPEC+ may resume output increases from April. Both Brent and WTI settled lower last week after comments from President Donald Trump suggesting a potential agreement with Tehran.