LONDON: Gold prices advanced towards last week’s two-month high on Monday as US bond yields continued to fall and investors looked to invest in the safe-haven metal over concerns about tensions between Russia and Ukraine.

Spot gold was 0.5% higher at $1,841.50 per ounce by 1013 GMT, holding close to last week’s high of $1,847.42 an ounce. US gold futures rose an equal amount to $1,840.70.

Investors are looking towards the US Federal Reserve’s two-day policy meeting starting on Tuesday. The Fed is expected tighten monetary policy at a much faster pace than thought a month ago to tame persistently high inflation.

“I don’t expect (Fed) to have a significant impact on what gold prices are doing at this moment because the markets are more concerned about what’s going on in Eastern Europe,” said Michael Hewson, chief market analyst at CMC Markets UK.

“The markets have already priced in a March hike so I don’t think there’s going to be any surprise.”

Rising US interest rates increase the opportunity cost of holding non-interest-bearing bullion. Benchmark US 10-year Treasury yields fell to an one-week low, helping gold.

The US State Department has ordered diplomats’ family members to leave Ukraine, as US President Joe Biden weighs options to counter a buildup of Russian troops in Ukraine.

Signs of poor risk appetite were displayed across markets as Asian and European shares slipped on worries over tighter monetary policy.

“Assuming that the current wave of risk aversion ebbs away eventually as the Fed addresses these fears, and barring a deterioration of the economic outlook, we thus believe that the gold and silver markets are again experiencing a temporary but no lasting rebound,” Julius Baer analyst Carsten Menke said.

Spot silver fell 0.4% to $24.12 an ounce and platinum was steady at $1,029.53.

Palladium rose 0.2% to $2,111.11, holding close to the last session’s two-month peak.