Gold reacts as a safe haven as middle-east conflict widens on US/UK air strikes

The United States and Britain launched airstrikes across Yemen beginning yesterday, attacking 16 locations, and striking 60 military targets in an attempt to stifle more drone attacks on merchant ships. Recently, there have been multiple unsuccessful drone attacks that have targeted merchant ships in the southern Red Sea by Yemen’s Houthis, an Iranian-backed military group.

These combined actions magnify the fear that the war in Israel is spreading to a much larger Middle East conflict involving multiple Iranian-backed military proxies. 

Speaking to MSNBC, the White House national security spokesperson John Kirby said that yesterday’s military activity targeting the Iranian-backed Houthis is intended to reduce this group’s ability to store, launch, and guide missiles and drones which have been used to attack merchant ships in the southern Red Sea. John Kirby also said,“We’re not looking for conflict with Iran. We’re not looking to escalate and there’s no reason for it to escalate beyond what happened over the last few days.”

However, experts warned that the recent military actions by the United States and Britain would likely lead to a response by the Houthis in Yemen. 

Gold trades higher as fear grows that the Middle East conflict will widen.

Gold prices had declined in New York trading after the release of yesterday’s inflation report. However, after the closing of New York before the opening in Australia, gold prices began to climb in Globex trading. 

When Australian trading resumed, gold prices had risen from their lows with gold futures gaining approximately $18 to open at $2033.20 in Sydney. Buying continued in Hong Kong and London and New York’s open today, taking gold futures to an intraday high of $2067.30. As of 5:20 PM ET, the most active February futures contract is fixed at $2051.60. Over the last 24 hours, gold has gained approximately $32.40.

Wishing you as always good trading,