Today’s pound, gold and oil prices in focus: commodity and currency check, 6 January

London: The pound is making a bit of a comeback against the dollar, rising 0.4% to $1.2465. This is a nice recovery after a tough week.

Last Thursday, the pound hit its lowest point since April 2024, mainly because factory output dropped sharply. That news wasn’t great for confidence.

New data shows UK business confidence has taken a hit since the autumn budget. The government’s plans to raise national insurance and the minimum wage have left many companies worried. Over half of them are planning to raise prices soon.

Shevaun Haviland from the British Chambers of Commerce pointed out that the budget’s impact is clear. Businesses are feeling the squeeze from rising costs and taxes.

On the flip side, the pound is slightly up against the euro, trading at about €1.2062. But it’s still feeling the pressure from a stronger dollar.

Gold prices are also taking a hit, down 0.2% to $2,634.93 per ounce. With the dollar getting stronger, gold isn’t looking too hot right now.

Last week, gold had a solid start as investors were gearing up for Trump’s return to office. In uncertain times, people often flock to gold as a safe bet.

But since gold is traded in dollars, a stronger dollar makes it pricier. Nitesh Shah from WisdomTree mentioned that Trump’s tariff plans are putting pressure on metal markets.

Oil prices are down too, with Brent crude futures falling to $76.21 per barrel. A stronger dollar is making oil more expensive for buyers.

Susannah Streeter from Hargreaves Lansdown noted that oil prices had been rising due to cold weather in the US and Europe, which usually boosts heating oil demand.

Traders are also keeping an eye on potential stimulus for China’s economy. But the strong dollar is causing a dip in oil demand, and there’s still uncertainty about energy needs.

Overall, the FTSE 100 index fell on Friday, trading at 8,206.89 points. It’s a mixed bag in the markets right now.