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Gold prices jumped more than 2% on Thursday to their highest in over a year and palladium extended a rally as Russian forces invaded Ukraine after President Vladimir Putin authorised what he called a special military operation.

Spot gold climbed 1.9% to $1 943.28 per ounce by 0720 GMT, after hitting its best level since January 2021 at $1 948.77. U.S. gold futures GCv1 jumped 1.9% to $1 945.90.

Russian forces fired missiles at several cities in Ukraine and landed troops on its coast on Thursday, according to officials and media reports. Read full story

“Gold is a safe-haven asset along with the U.S. dollar, and this is its day. We could inevitably see new all-time highs in gold,” Jeffrey Halley, a senior market analyst at OANDA, said.

Prices could continue rallying towards a resistance at $1 960 an ounce and test $2 000 in the next few sessions, Halley added.

Gold has risen about 8% in February so far as the Russia-Ukraine crisis walloped risk appetite. The metal is headed for its best monthly performance since July 2020.

Russia is the world’s third-largest producer of gold, while Moscow-based Nornickel is also a major producer of palladium and platinum.

Spot palladium added 2.7% to $2,549.01 an ounce, having earlier reached its highest since August 2021.

Silver gained 2.2% to $25.05 per ounce, and platinum rose 1.2% to $1 104.50.

The dollar and oil prices also rocketed higher, while global stocks and US bond yields dived.

“It’s just not the fog of war for gold, but also inflation, especially with oil hitting $100 a barrel, and that’s why gold is becoming a defensive product,” Stephen Innes, managing partner at SPI Asset Management, said.