Gold hit a three week high rising past US$1,200 an ounce as renewed violence in Yemen sparked safe haven interest.
The price has been increasing steadily all week, and jumped to US$1,218 before settling back down.
Speculation of a Greek exit from the Eurozone and Saudi jets bombing Yemen yesterday led to commodities rising across the board.
Gold traditionally has an inverted relationship with the US dollar, which has been weak, while heavy falls on equity markets also gave the metal a lift.
Commerzbank said the escalation of the situation in Yemen and the resulting fear that the conflict there could spread to the entire region was likely behind today’s uptick.
Slightly disappointing US economic data also argues against any interest rate hikes by the US Federal Reserve in the near future, which is good news for gold, said the broker.
Ten-year US Treasuries, another traditional alternative, also dropped to a 2½-month low yesterday reducing the opportunity cost of holding gold.
Silver also rallied to a 5½ weeks high, while platinum rose to a three-week high of nearly $1,170 per troy ounce.
Major movers
Randgold Resources up 18p at 4,900p
Fresnillo down 1p at 710p
Anglo American down 29p at 1,076p