Gold surged to the highest since 2020 after Russian forces attacked targets across Ukraine, triggering the worst security crisis in Europe since World War II and crushing risk sentiment.

President Vladimir Putin vowed to “demilitarize” Ukraine and replace its leaders, while the West threatened additional sanctions in response. U.S. President Joe Biden announced he would impose “further consequences” on Russia after what he called an “unprovoked and unjustified attack.”

The move sparked a flight to haven assets, with European stocks and U.S. futures dropping while Treasuries rallied. Gold jumped the most in almost two years, even as the dollar strengthened. Bullion priced in euros hit an all-time high.

“The Russian invasion of Ukraine puts the markets in panic mode,” said Alexander Zumpfe, senior trader at refiner Heraeus Metals Germany GmbH & Co. “Investors are throwing shares out of their portfolios and fleeing to safe havens.”

Bullion has risen in recent weeks as Moscow’s standoff with the West intensified, helping to offset other headwinds like the U.S. Federal Reserve’s policy tightening that was expected to weigh on the metal. Analysts will now be forced to look carefully at their price forecasts for the year.

We “expect that gold prices break through $2,000/oz in the coming days if the conflict further escalates,” Bernard Dahdah, senior commodities analyst at Natixis SA, wrote in a note. “A quick correction will ensue once the conflict’s intensity winds down.”

Spot gold jumped as much as 3.4% to $1,974.34 an ounce, the highest since September 2020, and traded at $1,957.49 at 12:29 p.m. in London.

Other precious metals also gained, with palladium rising as much as 8.8% to its highest since August on concerns over potential supply disruptions. Russia produces about 40% of the palladium mined globally. Silver and platinum also rallied, while the Bloomberg Dollar Spot Index rose 0.7%.

--With assistance from Winnie Zhu and Swansy Afonso.

This article was provided by Bloomberg News.