Melbourne - Gold climbed above $1 200 an ounce as Saudi Arabia and its allies started bombing targets in Yemen, boosting haven demand just as speculation increased that the Federal Reserve may keep rates lower for longer. Silver gained.
Bullion for immediate delivery rose as much as 0.5 percent to $1 201.60 an ounce, the highest price since March 5, and traded at $1 201.44 at 2.19pm in Singapore, according to Bloomberg generic pricing. The metal climbed for a seventh straight day, set for the longest run of advances since August 2012. Gold traded in Shanghai also rose.
Saudi Arabia’s bombing of Shi'a rebels in its southern neighbour brings attention back to unrest in the Middle East, and the potential for a disruption to oil shipments from the world’s largest producing region. Crude in New York advanced as much as 5.6 percent. Bullion prices climbed each day for the past six sessions after Fed policy makers including Chair Janet Yellen suggested after meeting last week that they aren’t in a hurry to raise borrowing costs for the first time since 2006.
“The latest thing that’s taken it up to $1 200 is rising geopolitical risk with the bombings in Yemen,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd, said by phone from Singapore. “Yellen was a bit more sanguine on the US economy, that saw the US dollar decline a bit after the last FOMC meeting, and gold rose quite significantly off the lows.”
Durable goods
The dollar fell on Wednesday after government data showed US orders for durable goods unexpectedly dropped in February. Bookings for goods meant to last at least three years declined 1.4 percent after a 2 percent gain in January that was smaller than previously estimated. The median forecast in a Bloomberg survey estimated that orders would rise 0.2 percent.
Gold for June delivery added as much as 0.3 percent to $1,201.40 an ounce on the Comex, the highest for a most-active contract since March 5, and traded at $1,201.40. Bullion of 99.99 percent purity added 0.8 percent to 240.2 yuan a gram ($1,201.84 an ounce) on the Shanghai Gold Exchange.
Silver for immediate delivery increased 0.6 percent to $17.0759 an ounce. Platinum rose 0.5 percent to $1,151.13 an ounce, while palladium advanced 0.5 percent to $768.88 an ounce.
Bloomberg