Gold pieces surged in the middle of the week amid escalating geopolitical tensions in Ukraine as well as Russia's decision to only accept payments in rubles for gas deliveries.

Yesterday, gold prices reached an almost weekly high of $1,937.30. The quotes jumped by 0.8% or $15.80. In the previous session, they sank by 0.4%.

On Tuesday, gold dropped due to Jerome Powell's hawkish comments. The Fed chair hinted that at that following time the central bank may raise the interest rate by 50 basis points instead of 25 basis points.

The Fed is ready to take more aggressive measures as inflation keeps rising. Many analysts forecast the steady growth of inflation throughout the year. Consumer prices will be up largely because of the economic war against Russia, a global supplier of many important commodities.

On Wednesday, inflation risks increased even more after Russian President Vladimir Putin announced that Russia would only accept payments in rubles for gas deliveries to "unfriendly countries".

The Kremlin's decision came as a response to Western sanctions that had hit Russia's economy hard. Energy prices jumped on March 23 following that statement. For instance, oil soared above $120. It also spurred demand for safe-haven assets.

Gold took advantage of the US stock market's uncertainty. Being extremely worried about skyrocketing inflation, they start dumping their shares. Therefore, gold managed to appreciate to $1,947.25 on Thursday night.

Some economists fear that inflation may finally get out of control because of rising energy prices, including oil.

In this case, an increase in the Fed's interest rates by 50 basis points will not be enough to curb inflation. Many experts point at a lag response of the Fed to growing consumer prices.

According to analyst Jim Wyckoff, in the near future, gold, which is considered one of the best hedge instruments against inflation, will climb higher amid high commodity prices.

Apart from that, gold is likely to climb higher amid geopolitical tensions. Today, EU and NATO leaders will hold a meeting in Brussel to discuss the Russia-Ukraine conflict. Joe Biden will also attend emergency meetings of NATO, the G7, and the EU.

There is a high probability that Western allies will impose new sanctions against Russia. If so, it will be bullish for gold.