Gold hit a near nine-month high on Tuesday, as the situation in Eastern Europe intensified after Russia ordered troops into breakaway regions of eastern Ukraine, supporting demand for safe-haven bullion.
Spot gold was up 0.2% at $1,909.60 per ounce by 0332 GMT, after scaling its highest since June 1 at $1,913.89 per ounce earlier. US gold futures gained 0.6% to $1,911.50.
"With the situation deteriorating seemingly by the day in Eastern Europe, there is very little reason to be negative on gold at the moment," said Jeffrey Halley, a senior market analyst at OANDA.
"Rising stagflationary pressures around the world are also underpinning the precious metal, a situation that will be exacerbated by massive Western sanctions on Russia if they come to play."
Spot gold may rise into $1,917-$1,920 range
Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine as independent on Monday and ordered the Russian Army to launch what Moscow called a peacekeeping operation into the area, accelerating a crisis the West fears could unleash a major war.
Oil jumped to a seven-year high, safe-havens rallied and US stock futures dived.
US President Joe Biden signed an executive order to prohibit trade and investment between US individuals and the two breakaway regions of eastern Ukraine, the White House said.
US benchmark 10-year yields slipped on deteriorating Ukraine crisis and US Federal Reserve rate hike bets.
While bullion is considered a hedge against inflation and geopolitical risks, interest rate hikes tend to raise the opportunity cost of holding non-yielding bullion.
Spot gold may test a resistance at $1,920 per ounce, a break above which could open the way towards $1,940, according to Reuters' technical analyst Wang Tao.
Spot silver gained 0.9% to $24.14 per ounce, platinum rose 0.9% to $1,083.68 and palladium was up 0.8% to $2,406.24.
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