Markets stabilise after a turbulent week as gold inches nearer to $5,000 an oz and TACO commerce remerges…

Markets are ending the week calmer, but investors remain skittish as they pile into gold. 

The FTSE 100 inched higher at the open before trading relatively flat and has failed to recover all of its losses, shedding 92 points this week. It is up 1.87 per cent year-to-date.

The FTSE 250 suffered a 0.43 per cent fall as investors in the domestically-focused index focused on weaker retail sales in the ‘golden quarter’.

Trump’s tariff threats triggered a downturn across global markets, with the S&P 500 experiencing its worst sell off since October.

Investors are still flocking to gold as geopolitical tensions weigh on sentiment

While the immediate trade war threat has receded, tensions remain high as the World Economic Forum in Davos ends today.

The breakdown in the US-EU relationship shows no signs of abating with the EU promising to defend itself ‘against any form of coercion’

The French and German indices opened lower this morning before stabilising to trade flat, but the mood was brighter across Asian markets with the Nikkei and Hang Seng closing higher.

The return of the TACO – Trump Always Chickens Out – trade helped to send US stocks higher on Thursday.

The S&P 500 climbed 0.55 per cent on Thursday but remains down 0.81 per cent over the week. The Dow Jones and Nasdaq also closed in the green.

Gold is nudging closer to $5,000 an ounce, gaining nearly 7 per cent this week, suggesting investors are still skittish about how this week’s events might play out.

Jason Hollands, managing director of Bestinvest said that while the Greenland threat might be over for now, ‘trust in America’s reliability is shattered.’

He added: ‘Such a shift has widespread implications both for global politics and security, and for financial markets, one of which is likely to be the continued use of Gold and less reliance on US Treasuries.

‘With a more dovish new Chair almost certain to replace Jerome Powell at the Fed this summer, loose monetary and fiscal policy – and continued concerns about the size of the US deficit – could see renewed softening of the dollar, which has already declined notably under the Trump administration.

‘This is another reason to hold Gold, as it has historically had an inverse correlation with the US dollar.’

Miners and defence companies continue to make gains, with BAE Systems leading the FTSE 100’s biggest risers.