Bitcoin hovered near recent highs of $97k and gold extended its rally on Tuesday, as investors positioned defensively ahead of the U.S. Federal Reserve’s upcoming policy decision and escalating geopolitical risks. With traditional markets growing cautious, demand for safe-haven assets surged, reinforcing Bitcoin’s evolving role as a digital alternative to gold.
The Federal Open Market Committee (FOMC) is widely expected to leave interest rates unchanged in the 4.25% to 4.50% range, but investor attention is now squarely on Fed Chair Jerome Powell’s post-meeting comments. Markets are searching for hints on how persistent inflation and weakening consumer demand may shape the Fed’s tone and policy path in the second half of the year.
Gold climbed 0.7% to $3,357 per ounce in spot markets, extending a two-week rally supported by surging demand for traditional protective assets. Bitcoin, meanwhile, traded around $97,500 on Tuesday night—hovering near the upper bound of its recent range and reinforcing its appeal amid global uncertainty.
Gold Rallies as Geopolitical Tensions and U.S. Trade Rhetoric Mount
Gold prices gained further ground Tuesday as market participants absorbed a wave of destabilizing global developments. U.S. gold futures rose 1.3%, driven by an uptick in Chinese demand and increased central bank moves to diversify reserves away from the U.S. dollar.
Geopolitical tensions in the Middle East added fuel to the market’s risk-averse posture. Over the weekend, a ballistic missile launched by Yemen’s Houthi forces struck near Tel Aviv’s Ben Gurion Airport, prompting a temporary airspace shutdown and causing injuries. In response, Israel launched a series of retaliatory airstrikes targeting infrastructure in Houthi-controlled areas of Yemen, resulting in three fatalities and numerous injuries. The Houthis warned of further retaliation, sparking fears of a broader regional escalation.
Simultaneously, markets are responding to a renewed protectionist shift in U.S. trade policy. President Donald Trump recently proposed imposing tariffs on foreign-produced pharmaceuticals and media content, raising concerns about global retaliation and disruption to already fragile supply chains.
Taken together, these factors have driven investors toward assets viewed as more resilient during periods of political and economic upheaval—including gold and Bitcoin—while creating the conditions for heightened market volatility in the days ahead.
Bitcoin Strength Holds as Fed Decision Looms
Asian equity markets edged higher and the U.S. dollar strengthened early Wednesday, buoyed by confirmation of renewed U.S.–China trade talks—a rare bright spot in an otherwise uncertain global macro environment.
Bitcoin continues to outperform altcoins, bolstered by institutional inflows into spot ETFs and market expectations of looser financial conditions later this year. Though still trading about 10% below its all-time high of $108,786, Bitcoin’s resilience reflects growing investor confidence in its role as a macro hedge, rather than merely a speculative asset.
All focus now shifts to the Federal Reserve’s rate decision and Powell’s press conference, which could provide critical guidance on whether the central bank intends to cut rates later in the year—or maintain a tighter stance due to sticky inflation and renewed geopolitical threats.
Quick Facts
- Bitcoin is trading near $97,500, approaching its February 2025 highs.
- Gold hit a two-week high of $3,357 per ounce, buoyed by safe-haven flows.
- The Federal Reserve is expected to keep rates unchanged, but policy signals remain in focus.
- Geopolitical tensions and trade policy shifts are driving increased demand for defensive assets.
