FTSE 100 Starts Week Down 1% as Gold Continues To Hit Highs

The FTSE 100 index witnessed a significant decline at the opening, dropping by 1.09%, equivalent to almost 95 points, bringing the index down to 8,564 points.

The early weakness comes as markets continue to digest a cocktail of domestic and international economic cues. Recent UK GDP and retail sales figures are being weighed alongside US inflation data, a critical input for global central bank policy trajectory, particularly the Federal Reserve.

Lingering concerns about the broader global economic outlook and the potential spectre of trade tensions further contribute to a climate where risk appetite appears somewhat tempered, potentially explaining the index’s lacklustre performance over the past month, which saw declines of 2.78% after a strong start to the year.

Zooming out from the immediate short-term noise reveals a more constructive picture for the UK's premier stock index. Since the start of 2025, the FTSE 100 has notched up solid gains of 3.69%. This builds on a solid foundation laid in 2024, during which the index delivered an almost 6% gain. T

Perhaps the most compelling argument for medium-term optimism lies beyond the charts, deep within the fundamental outlook for the index's constituents.

While analysts slightly tempered their aggregate pre-tax profit expectations for FTSE 100 companies for the full year 2024 late last year (down 5% from prior estimates to £224.4 billion, just shy of 2022's record), the forecast for 2025 paints a significantly brighter picture. Projections anticipate a powerful rebound, pushing aggregate profits to a new record high of £248.8 billion. This bullish corporate earnings outlook is further supported by broader forecasts predicting robust 14% annual earnings growth across the wider UK market.

Today's corporate news has seen Associated British Foods PLC (LON: ABF) facing a setback as the CEO of its retail arm, Primark, resigned due to inappropriate behavior. The stock price sits down 2.58% on the news.

Mining giants such as Anglo American (LON: AAL), Antofagasta (LON: ANTO), Glencore (LON: GLEN), and Rio Tinto (LON: RIO) also saw their share prices decrease by nearly 3%. These declines are partly due to broader market shifts impacting commodity prices and investor sentiment.

In an effort to stabilise finances, Aston Martin Lagonda Global Holdings PLC aims to raise over £125 million. This move involves investment from Lawrence Stroll's Yew Tree consortium and the sale of a minority stake in the Aston Martin Aramco Formula One team. The consortium plans to increase its stake in Aston Martin to 35%, pending shareholder approval.

The market downturn is also influenced by geopolitical tensions, particularly concerning tariff announcements by former U.S. President Donald Trump. This situation has led to a surge in gold prices, which have climbed to over $3,120 per ounce as investors seek safe-haven assets amid uncertainty.