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[MELBOURNE] Gold headed for the first back-to-back weekly climb since January after Saudi Arabia and its allies started bombing targets in Yemen, boosting demand for a haven as prices posted the longest run of gains in more than two years.
Bullion for immediate delivery traded at US$1,203.41 an ounce at 8:21 a.m. in Singapore from US$1,204.81 on Thursday, when it rose for a seventh straight day, according to Bloomberg generic pricing.
The metal rallied to US$1,219.79 on March 26, the highest level since March 2, and is up 1.8 percent this week. Gold traded in Shanghai also headed for a weekly advance.
Investors have historically turned to precious metals during times of geopolitical tension. Gold headed for the first quarterly gain since June as the Saudis headed a coalition of 10 Sunni-ruled nations that carried out raids around Yemen's capital. Saudi Arabia's southern neighbor is near the centre of world energy trade, and oil is set to post the biggest weekly gain since 2011 amid concern supplies may be disrupted.
"Gold prices rallied on safe-haven buying on concerns of geopolitical tensions as Saudi Arabia began air strikes in Yemen," Australia & New Zealand Banking Group said in an e-mailed note.
Gold climbed every day since Federal Reserve policy makers signaled last week they're in no hurry to raise interest rates, weakening the dollar and raising the appeal of bullion. Data on Thursday showed jobless claims dropped to the lowest level since mid-February, spurring a rebound in the U.S. currency.
Gold for June delivery was at US$1,203.80 on the Comex from US$1,205.70 on Thursday and is set to gain 1.6 per cent this week. Bullion of 99.99 per cent purity was at 240.80 yuan a gram ($1,205.92 an ounce) on the Shanghai Gold Exchange.
Silver for immediate delivery traded at US$17.0798 an ounce from US$17.1160, set for a second weekly advance. Platinum was little changed at $1,153 an ounce, set to gain for a second week. Palladium was also little changed at US$771 an ounce, heading for a third weekly loss.