Gold hits $3,875 as dollar weakens, Pfizer rallies

Gold rose to a record $3,875 per ounce as the US dollar slipped to a one-week low following the government shutdown. In New York, Pfizer shares jumped 6.8% after agreeing with President Trump to cut drug prices in Medicaid, while airline stocks fell on concerns about disruption from furloughed aviation staff. London’s FTSE 100 closed at a record high, with Rolls-Royce and Melrose up more than 2%, while ASOS and Evoke declined on weak demand and potential tax risks.

Equities

London’s FTSE 100 closed at a record high on Tuesday, ending the quarter with its strongest performance since October 2022. The blue-chip index rose 0.5% to finish at 9,350.43, supported by a weaker pound, while the FTSE 250 added 0.7%. Defence stocks led the gains, with Melrose and Rolls-Royce both climbing more than 2% after UBS raised its price targets.

ASOS fell 4.7% after warning that annual revenue would undershoot expectations because of soft consumer demand, while BT slipped 1.1% after New Street Research cut its rating on the stock to “neutral” from “buy.” Gambling firms also came under pressure amid speculation of possible tax hikes in the government’s November budget, with Evoke down 2.6%.

In the United States, Wall Street ended Tuesday higher, extending quarterly and monthly gains despite the looming threat of a government shutdown. The Dow Jones Industrial Average rose 81 points, or 0.18%, to 46,397.89, setting another record close. The S&P 500 gained 0.41% to 6,688.46, while the Nasdaq Composite added 0.31% to 22,660.01. For September, the S&P 500 rose 3.5%, marking its strongest September since 2010, while the Nasdaq climbed 5.6% and the Dow advanced 1.9%. Over the third quarter, the Nasdaq surged 11.2%, its biggest gain since 2010.

Pfizer rallied 6.8% after President Trump announced the company would cut the price of all prescription drugs in the Medicaid programme and sell new drugs at a “most favoured nation” price in exchange for tariff relief. The comments also supported other healthcare stocks, with the sector finishing as the S&P 500’s top performer.

Airline stocks fell on concerns about potential disruption from the shutdown, with Southwest Airlines down 2.6% and United Airlines losing 2.2%. The US Transportation Department said more than 11,000 employees at the Federal Aviation Administration could be furloughed, while 13,000 air traffic controllers would remain at work without pay.

Elsewhere, chipmaker Wolfspeed surged 29% after exiting bankruptcy, while Firefly Aerospace fell more than 20% after a rocket testing mishap destroyed its Alpha booster. Lamb Weston gained 4.3% after posting quarterly revenue and profit ahead of analysts’ estimates.

Forex & Commodities

The US dollar slipped to its lowest level in a week after the US government shut down overnight when Congress failed to agree a funding deal. The dollar index fell to 97.58 before edging back to 97.64 by 05:21 GMT. Against the yen, it weakened to 147.5, while the euro strengthened to $1.1767. Sterling was little mentioned in early trade, though moves were broadly in line with the softer dollar. The shutdown is set to delay key economic releases, including Friday’s non-farm payrolls report, leaving markets more reliant on private data such as today’s ADP employment update. The latest JOLTS survey yesterday showed marginal growth in job openings but weaker hiring, reinforcing concerns over the labour market.

Gold surged to a record high this morning as investors shifted into safe-haven assets, with spot prices touching $3,875 before steadying at $3,860 per ounce by 06:13 GMT. The rally has been supported by the weaker dollar, political tensions in Washington and expectations of rate cuts from the Federal Reserve. Analysts see upside risks towards $3,900 and above, though a rebound in the dollar or hawkish Fed rhetoric could act as a brake. Silver also firmed to $46.90, its strongest level in over fourteen years, while platinum and palladium slipped to $1,563 and $1,245 respectively.

Oil prices steadied in early trading today after two days of losses. Brent crude for December delivery rose to $66.28 a barrel by 06:43 GMT, while US West Texas Intermediate was at $62.59. The market is watching talks within OPEC+ over whether to raise output by as much as 500,000 barrels per day in November. A weekly report from the American Petroleum Institute yesterday showed US crude stocks fell by 3.67 million barrels, though gasoline and distillate inventories increased.