Gold prices rose to a five-week high as the conflict between Russia and Ukraine, rising inflation and the risk of a US recession boosted demand for safe-haven assets.

As of press time, spot gold rose 0.53% to $1984.03.

The price of both commodities has been boosted by the possibility of a de facto EU gas embargo on Russia and the threat of restrictions on some crude oil supplies in the next round of European sanctions. This has further pushed up already rising raw material prices, fuelling demand for gold as a hedge against accelerating inflation.

'History suggests the Fed will face the daunting task of tightening monetary policy to cool price rises without triggering a recession, 'Goldman Sachs said in a report. Goldman Sachs estimates that the chances of the US economy contracting over the next two years are about 35 per cent. While investors usually seek refuge in hard times, higher interest rates could put pressure on interest-free gold.