NEW YORK: Gold prices reversed course and slid 1% on Friday, while palladium dropped, as Russia’s invasion of Ukraine triggered wild swings in the precious complex as investors assessed the impact of the conflict.

Spot gold dipped 0.9% to $1,886.57 per ounce by 10:27 am ET (1527 GMT), swinging in negative and positive territory through the session. US gold futures slid 2% to $1,888.40.

“We think the price drop is premature, there is a risk of further escalation in the conflict and it could be just a temporary correction,” said Commerzbank analyst Daniel Briesemann.

There may be expectation among market participants that the sanctions imposed by the West on Russia are not tough enough, he added.

Prices of the safe-haven metal rallied over 3% to as high as $1,973.96 in the last session after Russia attacked Ukraine. Prices have retreated more than $80 from Thursday’s highs.

“The risk premium and safe haven demand will continue to support gold, but the upside is limited by the possible rate hike by the US Federal Reserve this March,” said Xaio Fu, head of commodities markets strategy at Bank of China International.

Palladium dropped 1.7% to $2,362.01. The metal touched $2,711.18 on Thursday, its highest since July last year.