Price of Gold and Silver Climbs as Safe Haven Trade Is Back On

The price of gold - and silver - rallied Thursday as investors piled into "risk off" trades.

The price of gold jumped $7.80, or 0.7%, to close at $1,204.80. That marked a four-week high for the yellow metal. It also stretched the gold price rally to a seventh session - the longest streak since 2012.

The price of silver, meanwhile, was up $0.14, or 0.8%, to $17.14. Intraday, the white metal traded as high as $17.50. The last time the silver price saw the $17 handle was Feb. 16, when silver ended at the day at $17.27.

Gold (green) & Silver (blue) vs. the Dow (red), 3/26/15

price of gold and silverA number of factors stoked Thursday's precious metals rally. Here's a look some catalysts driving gold and silver prices now.

Why the Price of Gold and Silver Rose

Four big drivers have pushed up these prices:

Gold and Silver Prices Up on Safe Haven Buying: Saudi and allied warplanes swiftly and suddenly attacked rebels in Yemen on Thursday. Saudi Arabia threatened ground troops and placed itself into its southern neighbor's civil war. The unexpected move opened up the potential for a broader sectarian conflict in the region.

Gold and Silver Prices Up on Slipping U.S. Dollar Index: Dollar index bulls have taken a step back after the greenback's recent robust rally. The dollar index, which measures the dollar against a basket of six major currencies, shed 0.52% to $96.52 in morning trading. A softer greenback has been an upbeat influence for the precious metals markets over the last few days.

Gold and Silver Prices Up on Lackluster Economic Data: Soft economic data this week has buoyed gold and silver. Wednesday's uninspiring durable goods report, showing a 1.4% decline month over month, was the latest in a string of weaker than expected economic reports. The read bolstered expectations the U.S. Federal Reserve will hold off on an interest rate hike until later this year. That's bullish for gold and silver prices.

Gold and Silver Prices Up on China's Increased Gold Imports: China's central bank announced Thursday it will allow more companies to import gold into the country starting next month. China currently allows only 15 banks to import gold. Effective April 1, domestic miners that have assets overseas will be allowed to bring the precious metal directly into the country. The move increases competition and will drive down premiums, according to the World Gold Council. In the past, Chinese gold buyers often had to pay steep premiums for quick delivery of the precious metal. During peak buying periods, the premium often spikes above $10 an ounce over the international rates.

Taking cues from these factors, gold as silver prices will see more upside in the weeks ahead.

Bullish Signs for Gold and Silver Prices in 2015

Gold and silver prices started 2015 strong. Silver began the year at $15.71, hitting $18.22 on Jan.22. Until this week, the silver price floundered. Still, the white metal is up a solid 10.23% year to date.

Gold kicked off 2015 at $1,172. It peaked at $1,295.75 on Jan 22. Year to date, the yellow metal is up just over 2%.

In comparison, the Dow Jones Industrial Average and the S&P 500 Index are both in the red. The two key benchmarks are off 0.81% and 0.13%, respectively. The Nasdaq is hanging on to a 2.7% gain.

Gold and silver are also outperforming other major commodities year to date. Natural gas is off 5.8%, soybeans are down 3%, wheat is lower by 12%. Thanks to a sharp 3% rise Thursday, oil prices trimmed its year to date loss to 4.6%.

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Overseas activity has been the main driver for the price of gold and silver.

Tepid global growth and Greece's debt woes are main concerns. Boiling tensions in the Middle East is another key.

Additionally, demand from India, which supplanted China in 2014 as the world's biggest gold consumer, could also provide near term price momentum for gold, and thus silver. Wedding season in the country lasts from March to June. That should deliver a reliable seasonal lift in jewelry demand and higher imports.

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