NEW YORK: Gold rose on Wednesday as Russian President Vladimir Putin’s move to mobilize more troops over the conflict in Ukraine drew investors to the safe-haven asset, offsetting pressure from a firmer dollar and looming US interest rate hikes.

Spot gold was 0.2% higher at $1,665.84 per ounce by 1:16 p.m. EDT (1716 GMT). US gold futures rose 0.2% to $1,674.20.

“A portion of the reason (for gold’s gains) were some comments by Russian President Putin in regards to escalating the conflict in Ukraine. ... That’s clearly a supportive factor,” said David Meger, director of metals trading at High Ridge Futures.

Putin on Wednesday called up 300,000 reservists to fight in Ukraine and said Moscow would respond with the might of all its vast arsenal if the West pursued its “nuclear blackmail”.

Bullion, however, faced headwinds from the dollar which jumped to a new two-decade high, making gold more expensive for overseas buyers, with elevated Treasury yields adding further pressure.

The spotlight is now on the Fed’s policy decision due at 2 p.m. EDT (1800 GMT), with the central bank widely expected to hike interest rates by 75 basis points, followed by Fed Chair Jerome Powell’s news conference.

Gold is considered a hedge against inflation and geopolitical risks, but rising rates increase the opportunity cost of holding non-yielding bullion.