NEW YORK: Palladium surged to a seven-month peak on Tuesday as Western sanctions against Russia over its invasion of Ukraine renewed concerns over supply of the metal, while tensions surrounding the crisis also bolstered demand for safe-haven gold.

The auto-catalyst metal jumped as much as 9.4% to $2,722.79 per ounce in the session and was up 2.2% at $2,543.94 by 12:41 p.m. EST (1741 GMT).

“There is tremendous concern that Russia, a key exporter of palladium, is going to face severe disruptions as the flight bans are going to impose a big trouble in getting supplies to different places,” said Edward Moya, senior market analyst at OANDA.

“Palladium market already has tight inventories and now the geopolitical risks are going to lead to severe supply shortages.”

Russia is the biggest producer of palladium, with Moscow-based Nornickel accounting for 40% of the metal’s global mine production last year.

Gold rose 1.4% to $1,933.83 per ounce as the crisis drove investors to safe-haven assets.

US gold futures gained 1.8% to $1,935.60.

Wall Street slipped and oil prices jumped back above $100 a barrel as a Russian armoured column bore down on Ukraine’s capital, Kyiv, on Tuesday.

“Bond yields have fallen as prices have recovered on safe-haven flows and with some investors reducing their expectations about aggressive tightening from central banks. Against this backdrop, I am expecting gold to go well north of $2,000,” Fawad Razaqzada, an analyst with ThinkMarkets, wrote in a note.

Gold is considered a safe store of value during such uncertainties and also a hedge against rising inflation. Investors were also anticipating Federal Reserve Chair Jerome Powell’s testimony before the US Congress on Wednesday and Thursday for more clarity on interest rate hikes amid the Ukraine tensions and soaring inflation.

Spot silver rose 3.4% to $25.25 per ounce while platinum gained 0.8% to $1,052.17.