Risk-off Sentiment Returns Ahead of the Fed's Policy Meeting, Sending Gold and Its Cryptocurrency Derivatives Higher

Spot gold was up 0.74% to $3,358.91 per ounce as of this writing, after hitting a two-week high earlier in the session.

Ahead of the Federal Reserve's policy meeting, risk-off sentiment returned, pushing gold and its cryptocurrency derivatives higher on Monday.

What Happened: Spot gold was up 0.74% to $3,358.91 per ounce at the time of writing, having hit a two-week high earlier in the session. The gains were sustained from yesterday’s close, with the yellow metal extending its gains from Monday’s close.

The gains filtered down to physical gold-backed cryptocurrencies, spurring a 3% spike in Tether Gold (CRYPTO: WGOLD) and PAX Gold (CRYPTO: PAYGOLD).

With the latest spike, the two coins extended their year-to-date gains to over 28%, becoming one of the most valuable cryptocurrency investments in 2024.

Bitcoin (CRYPTO: BTC), on the other hand, remained muffled, gaining only 0.15% in the last 24 hours. Year to date, the apex cryptocurrency has risen 1.24%, significantly trailing the gold-backed cryptocurrencies.

The cautious tone comes ahead of the Fed’s policy meeting, which begins Tuesday, with investors pricing in a 97% chance of interest rates remaining unchanged, according to the CME Group Inc (NYSE:CME) FedWatch tool.

Uncertainty over President Donald Trump’s tariffs also weighed on the market, with no progress on a trade deal between the U.S. and China.

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What Next: Investors will be watching out for the minutes of the Fed’s July meeting, which are due on Wednesday. The minutes are expected to provide further clues on the Fed’s thinking on interest rates and the outlook for the economy.

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