Gold held steady as investors weighed the severity of Western sanctions on Russia against prospects for tighter US monetary policy.

Bullion is having a strong start to 2022 on the back of rising geopolitical tensions in Europe, which have pushed prices to the highest in more than eight months despite expectations that the Federal Reserve will raise interest rates in March to curb inflation.

The tensions in Europe are raising concerns over potential disruption of supplies of raw materials, bolstering prices for everything from energy to wheat and nickel.

“The likelihood of a regional war seems high and that will likely keep inflationary pressures elevated for much of the year,” said Edward Moya, a senior market analyst at Oanda. “Bullion seems like it is taking a little break right now, but investors will soon be saying ‘I love gold,’ as geopolitical and growth concerns will drive safe-haven demand.”

The geopolitical strains between the West and Russia show no signs of abating. President Joe Biden unveiled sanctions targeting Russia’s sale of sovereign debt abroad and the country’s elites, responding to what he described as the start of an invasion of Ukraine.

While the U.S. leader said economic retaliation would increase if Moscow “continues its aggression,” the measures stopped short of the devastating steps that the nation and its allies have threatened. President Vladimir Putin said this week he would recognize two self-proclaimed separatist republics in the east of the smaller neighbor.

Putin, who has denied Russia intends to invade Ukraine, said Tuesday he’s not sending troops into the breakaway areas for now, but added, “Since there’s a conflict there, with this decision we’re clearly showing if necessary we are ready to fulfill this obligation.”

Spot gold was little changed at $1 900.39 an ounce at 8:52 a.m. in Singapore. Prices had touched $1 914.25 on Tuesday, the highest level since June 1, before ending 0.4% lower. Silver and platinum were up and palladium steady.