Gold, Geopolitics, and the Fed: The Triple Threat Shaping September Markets

With September on the horizon, global markets are bracing for potential U.S. Federal Reserve rate cuts, while geopolitical developments, such as the possibility of peace talks between Russia and Ukraine, have added a layer of uncertainty to financial markets, including the cryptocurrency sector. These two dynamics—monetary policy easing and diplomatic shifts—could have significant and diverging effects on investor sentiment and asset prices.

The expectation of a Fed rate cut, particularly at the central bank’s September meeting, has already begun to influence financial markets. Analysts point to a combination of slowing job growth and concerns over employment risks as factors pushing the Fed toward a rate cut. Federal Reserve Chair Jerome Powell’s recent comments at the Jackson Hole symposium hinted at the need to adjust the current restrictive monetary policy stance, leading markets to price in an 87% probability of a 25-basis-point reduction. This anticipation has pushed the 30-year fixed mortgage rate to a five-month low, illustrating how quickly expectations of lower borrowing costs can translate into market action.

Gold has been one of the primary beneficiaries of the Fed’s potential pivot. The precious metal has surged more than 34% in 2025, with analysts projecting further gains to the $3,600–$3,900 range, and even testing the $4,000 level by 2026 if global uncertainties persist. The weakening U.S. dollar, exacerbated by President Donald Trump’s criticisms of Fed independence and concerns over the Fed’s governance, has also supported gold prices. Central banks, particularly in developing economies like China, have continued to accumulate gold reserves, reinforcing the metal’s appeal as a hedge against currency devaluation and geopolitical instability.

Meanwhile, the possibility of direct peace talks between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky has introduced a new layer of uncertainty into global markets. Although Zelensky has long sought a face-to-face meeting with Putin, the Russian leader has remained skeptical of the Ukrainian president’s legitimacy to conduct peace negotiations, citing the expiration of his term and the absence of a post-martial law election. Putin, however, has left the door open for a meeting in Moscow if there is a clear path to a successful outcome. Such a development, if it materializes, could shift the geopolitical risk landscape and potentially ease investor concerns about prolonged conflict and energy market volatility.

The intersection of monetary policy easing and geopolitical risk has significant implications for the crypto market. Historically, cryptocurrencies have shown sensitivity to both rate cuts and geopolitical tensions. A Fed rate cut is likely to lower the opportunity cost of holding non-yielding assets like Bitcoin, potentially attracting capital inflows into digital assets. Conversely, heightened geopolitical risk—especially if peace talks fail—could trigger risk-off sentiment and draw investors toward safer assets such as gold. The extent to which crypto markets benefit from September’s developments will depend largely on whether rate cuts are enacted and whether diplomatic progress can be made in the Russia-Ukraine conflict.

Source: [1] Putin: Zelensky can come to Moscow for the meeting (https://www.bluewin.ch/en/news/international/putin-zelensky-can-come-to-moscow-for-the-meeting-2854805.html) [2] Looming Fed rate cuts fuel gold price bonanza to records (https://finance.yahoo.com/news/looming-fed-rate-cuts-fuel-162425170.html) [3] Mortgage Rates Fall on Fed Cut Speculation (https://www.floridarealtors.org/news-media/news-articles/2025/09/mortgage-rates-fall-fed-cut-speculation)