Gold glistens as FTSE 100 outdoes European peers

The FTSE 100 made steady progress on Monday, supported by gains in gold miners as the price of the yellow metal hit a new all-time high.

Broker Citigroup expects the gold bull market to continue near-term, setting a three month price target of 3,800 US dollars an ounce.

“Just about everything is going right for the gold bull market at the minute,” the broker stated in a research note.

The FTSE 100 index closed up 10.01 points, 0.1%, at 9,226.68. The FTSE 250 ended just seven points higher at 21,596.93, and the AIM All-Share closed up 3.93 points, 0.5%, at 777.53.

Gold was quoted at 3,729.11 US dollars an ounce at the time of the London equity market close on Monday, up against 3,670.59 dollars on Friday.

Citi expects both the cyclical drivers for gold, such as continued weakening in the US labour market, tariff-driven US and global growth concerns, and the structural drivers, like concerns on US debt, US dollar status and Federal Reserve independence, to remain bullish for gold over the next three to six months.

The renewed strength in gold was reflected on the FTSE 100, where Endeavour Mining rose 6.9% and Fresnillo climbed 4.6% – the top two blue chip performers. On the FTSE 250, Hochschild Mining jumped 8.4%.

Endeavour Mining was given a further lift as Bank of America (BofA) raised its share price target to 3,300p from 3,100p previously and reiterated a “buy” rating.

Analysts at BofA said: “We like Endeavour’s volume growth and capital return story as well as its unique geographic exposure to western Africa.”

In contrast, airlines lagged on London’s lead index, with easyJet down 1.3% and British Airways owner IAG falling 1.4%. Wizz Air fell 3.2% on the FTSE 250.

The declines followed an alleged cyber attack over the weekend targeting a service provider for check-in and boarding systems at European airports.

Heathrow, Brussels and Berlin airports all experienced delays and disruption on Saturday following the “technical issue” affecting Collins Aerospace, which works for several airlines at multiple airports across the world.

Meanwhile, Gatwick Airport said it is ready to press ahead with expansion plans after Transport Secretary Heidi Alexander approved a £2.2 billion plan for a second runway at the UK’s second-largest airport.

The airport will have to meet stricter conditions on the use of public transport and noise reduction, and pay the moving costs of residents wanting to move out of affected areas.

In European equities on Monday, the CAC 40 in Paris closed down 0.3%, while the DAX 40 in Frankfurt ended down 0.5%.

Stocks in New York were higher at the time of the London close. The Dow Jones Industrial Average was up slightly, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.3%.

The yield on the US 10-year Treasury was quoted at 4.15%, widened from 4.14%. The yield on the US 30-year Treasury was quoted at 4.77%, stretched from 4.75%.

The pound was quoted lower at 1.3501 dollars on Monday, compared to 1.3556 dollars on Friday. The euro stood at 1.1773 dollars, higher against 1.1746 dollars. Against the yen, the dollar was trading at 147.84 yen, slightly lower compared to 147.89 yen.

On the FTSE 250, Tate & Lyle (T&L) slid 6.4% as Morgan Stanley downgraded to “underweight” from “equal weight” with a reduced share price target of 500p, down from 590p.

Morgan Stanley sees a higher risk to Tate & Lyle’s midterm targets in light of Tyson Foods’ announcement that it will phase out sucralose from US-branded products, with the risk that more consumer packaged goods firms could follow.

This comes as part of the “Make America Healthy Again” initiative, with various food and beverage companies announcing a commitment to produce cleaner label food products.

The broker thinks this could weigh on T&L’s share price, noting sucralose represented around 9% of group sales in the financial year to March 2025.

Elsewhere, Elixirr International fell 0.5% despite the London-based management consulting firm announcing a further acquisition, after an “exceptional and transformative” first half of 2025.

Pre-tax profit rose 28% to £15.4 million in the six months to June 30 from £12 million the year before. Revenue grew 35% to £71.4 million from £53 million, with record sales achieved in five of the six months in the period.

Elixirr also announced the acquisition of US-based consultancy TRC Advisory for a maximum of 125 million dollars, including performance-based top-up and earn-out payments. The cash and shares deal is expected to be immediately earnings enhancing, Elixirr said.

The acquisition is the group’s seventh since its AIM initial public offer in 2020, the fifth in the US and its largest acquisition to date, adding “significant scale” as well as “accelerating” growth in the US.

Brent oil was quoted lower at 66.48 dollars a barrel at the time of the London equities close on Monday, from 66.56 dollars late on Friday.

The biggest risers on the FTSE 100 were Endeavour Mining, up 194p at 3,022p; Fresnillo, up 104p at 2,380p; St James’s Place, up 36.5p at 1,286p; Rio Tinto, up 94.5p at 4,693.5p; and Glencore, up 6.1p at 319.1p.

The biggest fallers on the FTSE 100 were Diageo, down 35.5p at 1,780p; Haleon, down 5.8p at 332.6p; Coca-Cola Europacific Partners, down 110p at 6,540p; M&G, down 4.2p at 254.6p; and Unilever, down 73p at 4,481p.

Tuesday’s global economic calendar has a slew of composite PMI readings, including in the UK, US and eurozone.

Tuesday’s UK corporate calendar has half-year results from do-it-yourself retailer Kingfisher and full-year earnings from engineering firm Smiths Group.

(Contributed by Alliance News)