Gold set for best month since May as appeal surges on Ukraine crisis

Gold prices rose more than 1% on Monday and were set for their best monthly gain in nine, after Western countries slapped fresh sanctions on Russia for invading Ukraine and President Vladimir Putin put his country`s nuclear deterrent on high alert.

Spot gold rose 1.2% to $1,909.89 per ounce by 0124 GMT. U.S. gold futures climbed 1.1% to $1,908.30.

The metal rose as much as 2.2% earlier in the session, to hover close to its September 2020 peak. It has gained about 6.3% this month.

Gold is often used as a hedge against inflation and as a means of preserving wealth during times of financial and political uncertainty.

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The United States said Putin was escalating the war with "dangerous rhetoric", amid signs that the biggest assault on a European state since World War Two was not producing rapid victories, but instead generating a far-reaching and concerted Western response.

In their strongest economic sanctions yet, the United States and Europe said on Saturday they would banish big Russian banks from the main global payments system SWIFT and announced other measures to limit Moscow`s use of a $630 billion war chest.

European nations and Canada moved on Sunday to shut their airspace to Russian aircraft, an unprecedented step aimed at pressuring Putin to end his invasion of Ukraine.

Russia`s central bank on Sunday said it would resume buying gold on the domestic market from Feb. 28, as it undertakes measures to try and ensure financial stability during Western sanctions against Moscow.

Auto-catalyst metal palladium jumped 5.9% to $2,506.55 and was all set for a third consecutive monthly rise after reaching its highest level since July 2021 at $2,711.18 last week.

Spot silver was up 0.4% to $24.28 per ounce, platinum rose 0.7% to $1,061.72.