Gold hits record highs on geopolitical tensions and Fed rate expectations

Gold hit a record high of $3045.31 per ounce on Wednesday, fueled by heightened geopolitical issues and trade instability. Prices are also being driven by investor concerns over escalating conflicts in the Middle East. Traders are now looking ahead to the Federal Reserve's decision on interest rates coming out today.

Tim Waterer, chief market analyst at KCM Trade, notes that economic turbulence and recession fears boost demand for gold. Trump's tariff policy, including a 25% tax on steel and aluminum starting April 2, adds to global market uncertainty. 

The Federal Reserve is set to finish its two-day monetary policy discussion on Wednesday. Investors predict that the interest rate will hold steady within the 4.25-4.50% range. Traditionally, gold tends to weaken in a high-interest-rate scenario. That’s why the hawkish rhetoric from the regulator could further pressure its prices.

In parallel, rising tensions in the Gaza Strip are driving precious metals quotes higher. Amid this growing instability, gold is further cementing its position as a key safe-haven asset for investors, Reuters reports.