Gold steadies after plunge as markets eye UK inflation

Gold rose to $4,145 per ounce early on Wednesday after its biggest one-day fall in five years unsettled global markets and prompted investors to reduce positions. The yen strengthened to ¥151.74 per dollar as Japan’s new Prime Minister, Sanae Takaichi, prepared a stimulus package expected to exceed ¥13.9 trillion, lifting the Nikkei from early losses. In oil markets, Brent crude climbed to $62.56 a barrel after the US confirmed plans to refill its strategic reserves and geopolitical tensions with Russia delayed a planned Trump-Putin summit.

Equities

London’s FTSE 100 rose 0.25% on Tuesday, marking its second consecutive day of gains as strength in banking and industrial shares offset a steep fall in precious metal miners. The blue-chip index was lifted by HSBC, which rose 1.8% after appointing former NatWest executive David Lindberg as chief executive of its UK business. The move supported the wider banking index, which closed 1.2% higher.

Aerospace and engineering group Melrose Industries climbed 5.3% after GE Aerospace in the United States raised its full-year earnings forecast for the second time in four months, signalling sustained strength in the aviation sector. Property company Segro advanced 2.9% following an update showing stronger rent signings in the third quarter. Serica Energy added 4.3% after resuming production at its Triton offloading vessel, which had been temporarily shut down.

Losses among precious metal miners weighed on the broader market. The precious metals index slumped 11.1%, its sharpest fall in more than ten months, as gold and silver prices dropped by 5% and 7% respectively. Fresnillo slid 14% and Endeavour Mining fell 9.8%, both logging their weakest sessions in nearly four years.

In the background, the UK government reported record borrowing for the April-to-September period outside the pandemic years, putting additional pressure on Chancellor Rachel Reeves ahead of next month’s budget. Investors were also awaiting the latest inflation figures, due on Wednesday, with expectations pointing to a 4% annual rise — the highest among major developed economies and double the Bank of England’s target.

In the United States, trading closed mixed on Tuesday as investors focused on earnings from large industrial and consumer companies. The Dow Jones Industrial Average rose 0.47% to 46,924.74, helped by gains in manufacturing and aerospace stocks. The S&P 500 ended virtually unchanged at 6,735.35, while the Nasdaq Composite slipped 0.16% to 22,953.67 amid weakness in technology shares.

General Motors jumped 14.9% after lifting its full-year outlook and saying it expects a smaller-than-feared impact from tariffs. Coca-Cola climbed 4.1% after posting better-than-expected quarterly earnings, supported by firm consumer demand. Diversified manufacturer 3M gained 7.7% after raising its annual profit forecast, citing higher-margin products and tighter cost controls.

Aerospace and defence firms also traded higher, with Lockheed Martin, Northrop Grumman and RTX all increasing their forecasts, sending the S&P 1500 Aerospace and Defence Index up 1.9%. Warner Bros Discovery rallied 11% late in the session after confirming it was reviewing strategic options and had turned down an offer from Paramount Skydance. By contrast, Netflix dropped 5.8% in afterhours trading after missing its quarterly earnings targets.

Forex & Commodities

The US dollar edged lower in Asian trading on Wednesday after touching a one-week high against the yen. It was last trading at ¥151.74 following data showing Japan’s exports rose in September for the first time in five months. The euro was slightly firmer at $1.1614, while sterling held steady at $1.3378 ahead of UK inflation data due later today. The Australian dollar rose to $0.6503 and the New Zealand dollar gained to $0.5753. Japan’s new prime minister, Sanae Takaichi, is preparing an economic stimulus package expected to exceed last year’s ¥13.9 trillion, aimed at easing household pressures from inflation. Both the Bank of Japan and the US Federal Reserve meet next week, with investors expecting the Fed to cut interest rates by 25 basis points and the BOJ to keep policy unchanged.

Gold steadied in early Wednesday trading after a turbulent session the previous day that saw its steepest fall in five years. The metal was last up 0.5% at $4,145 per ounce, recovering from a brief drop to $4,003 earlier in the morning. Tuesday’s sharp sell-off came as traders unwound long positions following a rally that had lifted prices to record levels. Analysts at Citi said prices had risen too far too quickly, while IG’s Tony Sycamore noted that stretched positioning had led to short-term volatility. Despite the pullback, gold remains up more than 50% this year amid persistent demand from investors and central banks seeking diversification away from the dollar.

Oil prices climbed for a second consecutive session on Wednesday, supported by renewed concerns over supply disruptions and US reserve purchases. Brent crude was last up 2% at $62.56 a barrel, while US West Texas Intermediate stood at $58.44. Gains followed reports that Western governments are pressuring Asian buyers to curb purchases of Russian oil and news that the US Department of Energy plans to buy one million barrels for its Strategic Petroleum Reserve. Prices also found support after a planned summit between President Donald Trump and Russian President Vladimir Putin was postponed, fuelling geopolitical uncertainty and driving some short covering across energy markets.