Gold maintained its shine while Bitcoin hovered around $100,000 as investors braced for the Federal Reserve’s policy announcement amid heightened geopolitical risks.
The U.S. Federal Open Market Committee is expected to maintain its interest rate between 4.25% and 4.50%, consistent with its previous two-day policy decision, during the meeting concluding on Wednesday.
Markets are closely watching Fed Chair Jerome Powell’s speech for insights regarding recent inflation trends, declining consumer demand, and ongoing price pressures.
Spot gold traded above $3,350 per ounce, while Bitcoin was priced at $96,500, remaining steady near the peak of its recent trading range.
A strong appetite for gold among Chinese investors, coupled with central banks reducing their exposure to American assets—particularly the U.S. dollar—has helped support the precious metal.
Middle East Tensions Drive Safe-Haven Demand
Tensions in the Middle East have also increased demand for safe-haven assets. On Saturday, an attack on Tel Aviv’s Ben Gurion Airport involving a ballistic missile fired by Houthi forces injured eight people and caused disruptions to airspace and halted air operations.
In response, Israel launched airstrikes on Houthi-controlled targets, including Sanaa’s international airport, a cement factory, power plants, and other infrastructure, resulting in three fatalities and multiple injuries. The Houthis stated that they would take countermeasures, claiming the strikes “will not go unanswered.”
Bitcoin retests highs amid market uncertainty
Simultaneously, U.S. foreign trade policy has taken a more aggressive turn after President Donald Trump recently announced plans to impose tariffs on imported pharmaceuticals and foreign-produced entertainment content. These actions have raised concerns about retaliatory measures and potential disruptions to global trade.
Bitfinex noted that if Bitcoin stays above $95,000, it would signal bullish sentiment as the cryptocurrency retests its all-time highs.
Bitcoin reached an all-time high of $109,000 on January 20, just hours before Trump’s inauguration as President of the United States. It is currently trading at $96,730, reflecting a 3% daily increase.
However, Bitfinex analysts cautioned that Bitcoin may not hold the $95,000 support level. If this threshold fails, it could become a resistance level again, raising the likelihood of a price rejection and another wave of corrective action.
They added that the coming days will determine whether Bitcoin enters a sustained breakout or reverts to testing lower support zones.
A positive shift in U.S.-China trade relations helped lift risk assets following the closure of U.S. stock markets on Wednesday.
“Tariffs and trade restrictions, even at these levels, cannot be maintained indefinitely. But we do not wish to decouple,” said U.S. Treasury Secretary Scott Bessent, who revealed he is heading to Switzerland this week for trade talks with Chinese officials.
“There have been senior U.S. officials giving the impression that they are considering changes to the tariffs,” stated a spokesperson for China’s Ministry of Commerce. “It is clear they are attempting to initiate dialogue with the other side regarding tariff-related issues.”
Meanwhile, Bitcoin has continued to benefit from speculative ETF inflows and broader positioning around potential monetary easing later this year. The leading cryptocurrency remains about 10% below its all-time high of $108,786, reached in January.
Markets are now focused on the Federal Reserve’s statement and Chair Powell’s press conference for clues on whether officials still anticipate policy easing this year, or if persistent inflation and geopolitical risks will keep the central bank on hold for a longer period.
