Markets displayed a cautious tone Tuesday, with gold climbing and Bitcoin holding strong, as traders eyed the Federal Reserve’s upcoming policy decision and braced for mounting geopolitical and economic uncertainties.
Gold prices gained traction, rising 0.7% to $3,357 per ounce, as investors gravitated toward traditional safe-haven assets. Bitcoin, meanwhile, traded steadily around $97,500, near its February highs, underpinned by bullish sentiment and speculative flows into crypto-linked exchange-traded funds.
The Federal Reserve’s two-day policy meeting concludes Wednesday, with broad consensus expecting the central bank to maintain its benchmark rate at 4.25%–4.50%. Yet with inflation proving stubborn and consumer demand showing early signs of fatigue, markets are intensely focused on any forward guidance from Fed Chair Jerome Powell.
Analysts note that gold’s momentum has also been reinforced by renewed Chinese demand and a shift by central banks to diversify away from U.S. dollar-denominated holdings. U.S. gold futures rose 1.3% on the day.
Geopolitical flashpoints have added to the cautious tone. Over the weekend, a missile launched by Yemen’s Houthi rebels landed near Israel’s main airport, injuring eight and disrupting air traffic. The incident prompted retaliatory airstrikes by Israel, escalating tensions in an already volatile region.
On the trade front, former President Donald Trump reintroduced proposals for tariffs targeting foreign-made pharmaceuticals and media products—moves that have revived concerns about global supply chains and potential trade retaliation.
Despite this complex backdrop, Asian equity markets advanced, and the dollar strengthened early Wednesday, supported by optimism surrounding renewed U.S.-China trade discussions.
Bitcoin’s resilience has also been attributed to expectations that financial conditions may loosen later this year, offering a potential tailwind for risk assets. Still, the cryptocurrency remains about 10% below its record high of $108,786 set in January.
Market watchers are now turning their attention to the Fed’s post-meeting statement and Powell’s press conference for any indication of a pivot toward rate cuts, possibly as early as June. Such a move could significantly boost risk appetite.
“There’s a clear path for Bitcoin to revisit $100,000 if the Fed leans dovish and signals rate reductions on the horizon,” said Nic Puckrin, founder of crypto research platform The Coin Bureau.
For now, investors remain in wait-and-see mode—positioned defensively as macro uncertainty, political tensions, and central bank policy all collide in a high-stakes week for global markets.