On May 6, 2025, gold prices rose to $3,434/ounce (according to #FXCE ) and Bitcoin held steady around $97,500 on Tuesday as investors prepared for the Federal Reserve's policy decision amidst geopolitical and trade tensions. Could this be a signal for a surge in safe-haven assets? Let’s analyze in detail.
Gold and Bitcoin Rise Ahead of Fed Decision
Spot gold rose 0.7% to $3,434/ounce, while US gold futures increased by 1.3%, supported by safe-haven demand from Chinese investors and central banks reducing reliance on the USD. Bitcoin fluctuated around $97,500, near the February peak, up 10% from a recent low, although still below the historical peak of $108,786 (January). The two-day meeting of the Federal Open Market Committee (#FOMC ) is expected to keep interest rates stable at 4.25%-4.50% on Wednesday afternoon (US time), with Chairman Jerome Powell's speech following. The market is particularly focused on signals regarding persistent inflation and declining consumer demand.
Geopolitical and Trade Tensions
The situation in the Middle East escalated as Houthi forces in Yemen fired ballistic missiles near Ben Gurion Airport in Tel Aviv on Saturday, injuring 8 people and disrupting air traffic. Israel retaliated with a series of airstrikes on Houthi infrastructure in Yemen, including Sanaa International Airport, a cement plant, and power facilities, resulting in 3 deaths and dozens of injuries. The Houthis threatened retaliation, increasing demand for safe assets. At the same time, President Donald Trump proposed new tariffs on foreign pharmaceuticals and media, raising concerns about retaliatory responses and disruptions to global trade. However, news of US-China trade negotiations lifted Asian stocks and strengthened the USD on Wednesday morning.
Impact on the Crypto Market
This event brings many signals:
Increased safe-haven demand: Gold and Bitcoin benefit from instability, similar to Bitcoin ETFs attracting $1.8 billion last week.
Volatility from the Fed: If Powell signals a rate cut in June, Bitcoin could reach $100,000 – a liquidity attractor, according to Nic Puckrin (The Coin Bureau). Conversely, persistent inflation could dampen the upward momentum.
Long-term support: Crypto fund inflows reached $3.4 billion last week and are projected to accumulate $330 billion into Bitcoin by 2029 (Bernstein), reinforcing the trend.
Future Prospects
With Bitcoin prices rising by 10% recently and gold increasing due to Chinese investors, both assets have the potential to break out if the Fed cuts rates. However, geopolitical tensions and Trump's trade policies may create volatility in the next 1-2 months, requiring investors to monitor closely.
Conclusion: Will Bitcoin and Gold Surge After the Fed?
Gold increased by 0.7% to $3,357 and Bitcoin held steady at $97,500 ahead of the Fed decision, amid Middle East tensions and Trump tariffs. If Powell signals a rate cut, Bitcoin could reach $100,000, while gold continues to attract. Investors should closely monitor to seize opportunities in this volatile market.
Risk warning: Crypto investments carry high risks due to price volatility and legal uncertainties. Please consider carefully before participating.
