By Asha Sistla

(Reuters) – Gold was flat Thursday, but the prices of the metal were expected to gain for the second week in a row due to the Ukraine crisis. Inflationary pressures are also increasing.

At $1,974.28 an ounce, it was little different as of 0426 GMT. U.S. fell 0.4% to $1,977.60

The weekly gain in metals has been 1.4%. The holiday will see most markets close on Friday.

Stephen Innes (Managing Partner at SPI Asset Management) stated that the “Political Risk Premium through Ukraine War Escalation is Building Again, Which pushed all commodities higher and that’s really creating an inflation environment.”

“On the other side, it is not clear if this short-term phenomenon is real or whether the markets have a tendency to reduce risk in light of the Fed’s Lael Minder’s less hawkish statements.”

Fed Governor Brainard announced Tuesday that the U.S. central banks would raise interest rates and start reducing bond holdings by June. This is to reduce inflation which hit an all-time high of four decades in March.

Brian Lan (managing director, dealer GoldSilver Central) stated, “Gold is trending at this time and it’s supported mostly by what we have received from the Fed. The U.S. inflation (data).”

On Wednesday, the U.S. President Joe Biden declared an additional $800 Million in military assistance for Ukraine, in advance of a greater Russian attack in eastern Ukraine.

The non-yielding bullion can be used as a security measure during times of uncertainty and to hedge against inflation.

Following a fall in Treasury yields and lowering gold prices, May 2020’s highs were retracted. This made gold attractive to currency holders. [USD/] [US/]

Spot Silver was flat at $25.73 a pound, Platinum was the same at $986.27, and Palladium rose 2.3%, to $2,368.85