Gold Prices Reach Historic High Amid Rising Demand for Safe-Haven Assets Ahead of Fed Decision

Gold prices surged to an all-time high during Asian trading on Wednesday, driven by increased demand for safe-haven assets. The surge comes amid escalating geopolitical tensions in the Middle East and concerns over trade tariffs, pushing investors to seek refuge in gold.

Markets remained cautious ahead of the Federal Reserve’s policy meeting conclusion later in the day, with investors anticipating fresh insights into the state of the U.S. economy.

Last week, gold saw significant gains as risk appetite weakened due to former U.S. President Donald Trump's renewed threats of higher trade tariffs. Growing fears of a U.S. recession also contributed to market uncertainty, leading to a weaker dollar, which further bolstered gold’s appeal.

Spot gold prices edged up 0.1%, reaching a historic peak of $3,039.0 per ounce, while gold futures for May delivery climbed 0.1% to a record $3,046.12 per ounce.

Meanwhile, the Bank of Japan made no major policy adjustments during its meeting on Wednesday, and the Bank of England is expected to keep interest rates unchanged.

On Tuesday, gold hit a fresh all-time high following the collapse of the ceasefire between Israel and Hamas, adding to geopolitical uncertainty. A lack of significant progress in Russia-Ukraine ceasefire talks also fueled demand for safe-haven assets.

Federal Reserve Holds Rates Amid Economic Uncertainty

The Federal Reserve is widely expected to maintain its key interest rate at 4.5% following its Wednesday meeting, as economic uncertainty lingers under the Trump administration.
Fed officials have repeatedly highlighted the uncertain short-term economic outlook, particularly given the unpredictable nature of U.S. trade policies. As a result, the central bank has limited room for further rate cuts in the near future.