Global markets experienced a sharp reaction as geopolitical tensions escalated following military actions involving the United States and Israel against Iran.
This prompted investors to shift towards traditional safe-haven assets.
The price of gold rose significantly, reaching approximately £3,690 to £3,700 per troy ounce as traders sought protection from the uncertainty in the Middle East, providing a sense of security amid geopolitical risks.
Despite mounting regional risks, the FTSE 100 ended the week at a record high of 10,910.55, up 63.85 points, or 0.6%, reflecting resilience in UK equities that may reassure investors about market strength.
The performance of the UK benchmark index reflected strong momentum in corporate earnings; however, analysts cautioned that geopolitical instability could soon impact equity markets.
Market strategists noted that the surge in gold prices aligns with historical trends observed during military crises. In that capital, it typically realigns toward precious metals, defensive equities, and government bonds in stable economies.
Russ Mould, investment director at AJ Bell, said: “Two months in, it looks like 2026 could be a second bumper year in a row for investors putting their faith in UK stocks if current performance trends continue.”
The escalation of tensions in the Middle East has raised concerns about potential disruptions to energy supplies and global trade routes, which could lead to sustained increases in oil prices and supply chain disruptions, impacting various sectors and markets worldwide.
