Global financial markets began the week under renewed strain as a combination of political and economic turmoil in the United States and France spurred investor uncertainty. The twin crises have driven traditional safe-haven assets such as gold and Bitcoin to record highs while shaking confidence in European equities.
Gold prices surged toward $4,000 an ounce early Monday, marking a new record, before easing slightly to around $3,970 by Tuesday morning. The rally has been driven by expectations of further interest rate cuts from the US Federal Reserve, coupled with heightened geopolitical risks and central bank demand. The metal has seen a remarkable rise from $2,669 at the start of the year, supported by a weaker dollar that has made gold more attractive to international buyers.
Bitcoin also joined the rally, climbing above $125,000 on Sunday and surpassing that level again on Monday. The world’s leading cryptocurrency has gained more than 30 percent since the beginning of the year, buoyed by the US administration’s crypto-friendly stance and growing concerns about the dollar’s long-term stability. However, analysts warned that the surge could be temporary.
Thibault Desachy, head of investment and wealth management at Coinhouse, cautioned that the market may be nearing the end of a bullish phase. “We remain convinced that we are approaching the end of a cycle and that caution is warranted. It is advisable to adopt a more trading-oriented stance rather than an investment-oriented one to avoid getting caught in a bear market,” he said.
In Europe, markets reacted sharply to France’s escalating political turmoil following the resignation of Prime Minister Sébastien Lecornu less than a month after taking office. The unexpected departure, stemming from disputes over the national budget and cabinet composition, rattled investor confidence and sent French stocks lower.
At mid-morning on Tuesday, the CAC 40 in Paris had slipped 0.2 percent, while Frankfurt’s DAX was down 0.1 percent. London’s FTSE 100 managed a slight gain, and Spain’s IBEX 35 remained flat. The pan-European STOXX 600 index showed little movement overall, with losses in healthcare and industrial sectors offset by gains in luxury and energy shares, including LVMH, Kering, and Shell.
In commodities trading, Brent crude slipped 0.5 percent to $65.12 a barrel, while WTI crude hovered near $61.40. Despite the political standoff in Washington leading to a federal government shutdown, Wall Street remained resilient on Monday. The S&P 500 gained 0.4 percent to close at a record 6,740.28, while the Nasdaq advanced 0.7 percent to another record high at 22,941.67. The Dow Jones Industrial Average edged up 0.1 percent to 46,694.97.
Meanwhile, currency markets saw modest shifts. The US dollar strengthened slightly to 150.49 yen, while the euro dipped to $1.1695 from $1.1714.
As both Washington and Paris navigate political upheaval, global markets are bracing for continued volatility driven by policy uncertainty and investor flight to safer assets.
