Yemen air strikes boost gold prices

Photo: Investing in Gold

Air strikes on Yemen this week have boosted the value of precious metals, as gold enjoyed its longest run of rises in over two years.

Saudi Arabia and its allies began to bomb targets in Yemen on Thursday 26th March, an attack that has continued today. In times of political tensions and conflict, investors traditionally turn to safe haven assets to shelter from the uncertain equity valuations.  As a result, oil prices have risen to their highest level in a forightnight, while gold has risen 4.7 per cent in seven straight sessions of gains, reports Bloomberg, its longest run of increases since August 2012.

The rise arrives as the precious metal is already enjoying an uplift from the Federal Reserve's recent decision not to raise interest rates immediately, which has helped to weaken the dollar and, as a result, strengthen bullion.

"Concern about a growing conflagration on the Saudi peninsula drove gold’s haven-premium higher," Tai Wong, the director of commodity products trading at BMO Capital Markets Corp, told Bloomberg. "Continuing weakness in the dollar is helping gold."

Silver futures for May delivery also rose 0.8 per cent to $17.14 an ounce on the Comex, a positive rebound following a 13 per cent decline in the past year.