(Bloomberg – Gold climbed to an eight-month peak above $1,900 an troy ounce after the long standoff with Ukraine fuelled demand.

The U.S. ramped up warnings of a possible Russian attack, with President Joe Biden saying a “false-flag” event may be under way. Moscow said no invasion was planned, but given proposed U.S. security assurances were unsatisfactory, Russia might have to resort to “military-technical measures.”

As fears of an EU conflict fueled gold’s strong year-start, prices have risen to their highest level since June. Even though the U.S. Federal Reserve plans to increase rates, the commodity could see a third weekly gain. This would likely dampen demand for this non-interest bearing precious material. 

“Expect gold to remain quite volatile,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “We could still see gold add a significant amount on official news of an invasion,” Feeney said, adding that there could be a drop of $50 or more if the situation calmed.

Citigroup Inc (NYSE:). Aakash and other analysts raised the near-term price of gold to $1,950 (from $1,825) due to geopolitical tensions. Further out, the bank remains bearish, with a target of $1,750 over six to 12 months as “higher real yields and stronger equities can weigh on bullion prices again.”

This rose to $0.2% at $1.902.48 per ounce. It was the highest price since June 11th. The exchange traded at $1.901.13 in Singapore at 08:39. The Bloomberg Dollar Spot Index remained flat. The Bloomberg Dollar Spot Index was flat for silver, palladium and platinum.

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