By Barani Krishnan

Investing.com – Gold closed at its highest point in 13 months Wednesday. Investors continued to pump money into the metal, both from countries seeking to protect themselves against inflation and geopolitical tensions triggered by the Russia/Ukraine crisis.

“The gold trade is an easy one right now as geopolitical tensions will continue to drive inflationary pressures to the next level, which will feed into aggressive Fed tightening calls that will threaten financial conditions and ultimately economic growth,” Ed Moya of online trading platform OANDA wrote in his daily markets commentary.

“Gold is still respecting the $1,920 level for now,” Moya added, referring to the current resistance, “but a break could see an easy path towards the $1,950 region.”

​​Gold’s most active contract on New York’s Comex, , settled up $3, or 0.2% at $1,910.40 an ounce. Although the settlement was not significant, it is the largest for benchmark Comex gold contracts since January 7, 2021 when it closed at $1935.50.

Gold prices have taken off in recent weeks from the combination of runaway inflation and fears about the impact of U.S. and other Western sanctions on Russia for its “backdoor invasion” of Ukraine.

President Joe Biden announced on Wednesday that his administration would impose additional sanctions on Russia’s Nord Stream 2 AG gas pipeline project to Germany, on top of earlier measures targeting two Russian banks, Russian elites and their family members and Russia’s sovereign debt. Those sanctions came after Russia’s parliament on Tuesday approved troops for what was described as “peacekeeping operations” in the two breakaway regions in eastern Ukraine that Moscow formally endorsed on Tuesday.

The U.S. Consumer Price Index grew 7.0% from December 1982 to December 1993, making it the highest inflation reading since 1982.

Comparatively, the U.S. economic growth was 5.7 percent in 2021. This is its fastest rate since 1984. Its highest performance after a 3.5% contraction that occurred in 2020 as a result from the coronavirus virus pandemic.

After the March 2020 outbreak of coronavirus, the Federal Reserve cut interest rates almost to zero. In an effort to combat inflation, the Federal Reserve is likely to raise rates in 2019.