Gold prices have rebounded this month, with the precious metal glittering in the gloom amid escalating tensions between Russia and the West.
The commodity has soared from $1,791 per ounce at the end of January to $1,904 earlier this week, with prices currently hovering around the $1,900 milestone.
The Kremlin's positioning of nearly 200,000 troops within close proximity to Ukraine's borders, followed by Putin's decision to recognize the independence of two breakaway rebel-held states has provided gold with fresh impetus from nervous investors seeking a safe haven.
After a slow start of the year for the commodity, the prospect of Western sanctions, energy shortages, and market chaos has motivated worried investors looking for somewhere to park their cash.
Commerzbank analyst Daniel Briesemann said: "If the Ukraine crisis escalates further, we believe that gold will remain in demand amid increased risk aversion, meaning that its price will probably make further gains."
But some analysts have cautioned that even gold could be susceptible to geopolitical jitters as Russian aggression in Ukraine intensifies.
"It's important to stress that the price of gold is determined entirely by supply and demand," Susannah Streeter, senior investment analyst at Hargreaves Lansdown told City A.M.
"Since a large portion of demand is driven by investor sentiment - which can change quickly - it can be volatile."
Related: 5 Commodities That Could Explode As The Ukraine Crisis Escalates
Meanwhile, painful spikes in the inflation rates across developed economies have further powered its revival. Gold is also benefiting from concerns that US growth could slow as the Federal Reserve is forced to tame inflation, with both the Federal Reserve and the Bank of England recently unveiling hikes to interest rates.
Gold has even managed to outperform equities since the start of the year, with Bloomberg registering that gold ETFs have registered inflows for five days in a row. The slide in stock markets and bond yields has also benefitted the commodity, with both factors reflecting high-risk aversion from bearish investors.
As for where prices could peak Commerzbank suggests the firm US dollar is preventing any steeper upswing in the gold price.
Rupert Rowling, a market analyst at Kinesis Money, said the next few days could be crucial in determining whether gold will tail off or close in on the $2,000 milestone - as it continues to face resistance at $1,900.
He said: "The next few days will be key in determining whether fears over Ukraine can outweigh the encouraging data on the economic front as well as the likelihood of a series of interest rate hikes this year by central banks with the latter two factors applying the brakes to further gold gains."
Craig Erlam, a senior markets analyst at OANDA, was more bullish about gold's performance, and expected that a worsening crisis in Ukraine would only be good news for gold.
He said: "For so long, people have questioned gold's position as a safe haven and an inflation hedge but recent events have put that debate to bed. The yellow metal continues to trade around $1,900 and could go much further in the event of major escalation."
By City AM
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