(Bloomberg — Gold lost some of its early gains after investors evaluated the risks associated with a U.S. downturn, increased inflation, and war in Europe.

Following increases in oil prices and inflation, the precious metal rose as high as 1% earlier. The possibility of a de facto European Union embargo on Russian gas and the threat of some curbs on crude in Europe’s next sanctions package have bolstered both commodities. That’s adding to already elevated raw material prices, fueling demand for gold as a hedge against accelerating inflation.

In Ukraine, the remaining defenders of Mariupol are encircled by Russian forces though haven’t surrendered the strategically important eastern port city, with troops still holding out at the giant Azovstal steelworks, Ukrainian officials said. Lviv, near the Polish border was hit by a devastating strike. Air raid sirens also were heard in Kyiv, for the second consecutive day.

Bullion’s resilience comes even as the benchmark inched higher with investors looking to speeches by Federal Reserve policy makers for new clues on whether it will raise interest rates by a half point in May.

“Gold is being reinforced by elevated inflation and heightened geopolitical risk,” said Kelvin Wong, an analyst at CMC Markets in Singapore. Prices rising above the key medium-term technical resistance level of $1,975 is “likely to have attracted momentum-based traders back into the bullish camp,” he said.

After touching $1,978.91 an troy ounce earlier in the day, New York’s intraday low was held steady at $55 p.m. The Comex settled at $1,986.40 for Bullion to be delivered in June. Bloomberg Dollar Spot Index increased 0.3%. Silver, palladium and platinum all moved up.

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