Gold prices extended gains and Bitcoin hovered near February highs on Tuesday as investors positioned ahead of the Federal Reserve’s policy announcement and digested fresh geopolitical and trade-related risks.

The Federal Open Market Committee is expected to hold interest rates steady at 4.25 to 4.50 when it concludes its two-day meeting Wednesday afternoon, U.S. time. 

Chair Jerome Powell will deliver remarks shortly afterward, with markets watching for any shifts in tone following recent signs of persistent inflation and softening consumer demand.

Ahead of the decision, spot gold rose 0.7 to $3,357 per ounce, buoyed by safe-haven demand, data shows. Bitcoin was recently trading at $97,500, holding firm near the upper end of its recent trading range.

U.S. gold futures also gained 1.3, with analysts citing a return of Chinese investors to the yellow metal alongside central banks seeking to cut exposure to U.S. assets, notably the dollar.

In the Middle East, a ballistic missile fired by Houthi forces in Yemen struck near Tel Aviv’s Ben Gurion Airport on Saturday, injuring eight and briefly halting air traffic. 

In response, Israel launched a series of airstrikes on Houthi-controlled infrastructure in Yemen, including Sanaa’s international airport, a cement factory, and power facilities, killing at least three and wounding dozens. The Houthis have vowed retaliation, warning the attacks “will not go unanswered.”

Meanwhile, U.S. trade policy took a hawkish turn after President Donald Trump announced proposed levies on foreign-produced pharmaceuticals and media in recent days. The measures have stoked concerns of retaliatory action and further disruptions to global trade flows.

Still, Bitcoin has benefited from both speculative ETF flows and broader positioning around potential easing in financial conditions later this year.  The dominant crypto remains about 10 off its all-time high of $108,786 reached in January.

Markets will turn to the Fed statement and Powell’s press conference for clues on whether officials still expect to ease policy later this year—or whether sticky inflation and geopolitics will keep the central bank on hold for longer.

“If the Fed surprises with some dovish tones tomorrow as well as guidance for rate cuts in June, there’s room for Bitcoin to rally all the way back up to that $100,000 level, which remains a liquidity magnet,” Nic Puckrin, founder of The Coin Bureau, said in a statement shared with Decrypt.

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