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Spot gold climbed 1.7% to $1,657.00 per ounce by 12:40 p.m. ET, touching its highest in a week and erasing some of the losses from an extended slide that dragged prices down to the lowest since April 2020. US gold futures also advanced 1.7% to trade at $1,664.60 in New York.

Meanwhile, the US dollar retreated after scaling a new two-decade high, making bullion less expensive for overseas buyers. Treasury yields also eased, adding more appeal to the non-yielding bullion.

A pullback in the dollar and yields have “seen gold move off those lows,” said David Meger, director of metals trading at High Ridge Futures, in a Reuters report.

“The factors in regards to Russia and the discussion of annexation… that probably gave a bid to the (gold) market from a safe-haven perspective,” Meger added.

Moscow was poised on Wednesday to annex a swath of Ukraine, releasing what it called vote tallies showing support in four partially occupied provinces to join Russia, after what Kyiv and the West denounced as illegal sham referendums held at gunpoint.

Moreover, “gold is seeing some relief as the UK’s plan to buy long-end Gilts sees yields weaken,” TD Securities said in a note. Still, bullion has failed to benefit from the recent rout in equities and faces headwinds from looming rate hikes, which would raise the opportunity cost of holding the metal.

“It’s all tied together — the same factors that have been weighing on gold have been weighing on equities,” Meger said.