Spot gold held its ground at $3,035.12 an ounce, as of 04:15 GMT, after hitting an all-time peak of $3,038.90 earlier in the session.

The US gold futures firmed 0.1% to $3,042.20.

“Traders are viewing gold as an asset which is well equipped to handle tariff-related economic uncertainty,” KCM Trade chief market analyst Tim Waterer said, adding that the current trading environment, where there is instability, is playing to gold’s strengths as an uncertainty hedge.

Investors are worried about an economic slowdown and elevated risks of recession due to US President Donald Trump’s tariffs, which are widely considered likely to stoke inflation.

The tariffs have flared up trade tensions and include a flat 25% levy on steel and aluminium, which came into effect in February, and reciprocal and sectoral tariffs to be imposed on April 2.

The Fed, which will conclude its two-day policy meeting later in the day, is expected to hold its benchmark interest rate steady in the 4.25%-4.50% range.

Non-yielding gold, a hedge against geopolitical and economic uncertainties, thrives in a low interest rate environment.

“If the FOMC meeting takes on a dovish tone in response to growing uncertainty over how tariffs may impact growth, this could provide a further assist to the gold price… could be a green light for gold to make a push above $3,050,” Waterer said.

Markets also await Fed chair Powell’s speech at 18:30 GMT to pick up further clues on policy outlook.

Elsewhere, Israeli airstrikes pounded Gaza and killed more than 400 people on Tuesday, Palestinian health authorities said, shattering nearly two months of relative calm since a ceasefire began, as Israel warned the onslaught was “just the beginning.”

Spot silver fell 0.2% to $33.97 an ounce, platinum lost 0.4% to $992.85 and palladium eased 0.1% to $966.24.