Middle East a Powder Keg as Saudi Bombing of Yemen Resumes

by Mark O’Byrne, Gold Core

– Saudi operation in Yemen enters new phase as U.S. and Iranian Navies gather in the Gulf of Aden
– Saudi’s blame Houthi rebels and Iran for Saudi bombardment of Yemen, supported by US
– Chinese President Xi calls Saudi King Salman urging speedy resolution to crisis, Chinese media take neutral stance
– Russian media describes Saudi operation as ethnic cleansing and Iranian media emphasise that Saudi is operating without a UN mandate to restore their ally, the former President, to power in Yemen

While the US beefs up its navy presence around the Gulf of Aden – apparently in response to Iran dispatching a navy convoy to bring arms to the Yemeni rebels – the Saudi’s operation has entered a new phase.

Following an initial announcement on Wednesday that Saudi Arabia was to end its bombardment of Yemen, it later resumed bombing of rebel positions.   The risk of a ‘proxy’ war remains real.

U.S. Navy officials confirmed to AP that the aircraft carrier USS Theodore Roosevelt is in Yemeni waters to intercept an Iranian weapons shipments. This was then denied and the U.S. said it was there to “keep shipping lanes in the region open” as Iran parked two warships off the Yemeni coast.


The resumption of violence was played down by the Saudi government who insist that any further bombings will be in response to Houthi rebel actions.

Iran’s Press TV reports, “Saudi government spokesman Brigadier General Ahmed al-Assiri, in a broadcast late on Tuesday, announced the termination of the first phase of the Saudi war on Yemen, which was codenamed as the so-called Decisive Storm against Yemen.”

The latest phase of Saudi’s war in Yemen which has resulted in the deaths of more than 1,000 people is being called “Renewal of Hope” according to the New York Times.

NYMEX Light Sweet Crude Oil (WTI)

NYMEX Light Sweet Crude Oil (WTI)

“Saudi ambassador to the United States, Adel al-Jubeir, said the campaign was shifting to a new phase — one in which Saudi airstrikes would be more limited and come only in response to Houthi attacks, such as the assault against Yemeni troops in Taiz”, reports The New York Times.

The New York Times refers to “Saudi insistence on continuing to wield airstrikes as a cudgel, if necessary, to batter rebel Houthi leaders to the bargaining table”.

It adds, incongruously, that “The Houthis issued a statement declaring that they were ready ‘to resume political dialogue’ under United Nations auspices, but only after ‘a complete end to the aggression against Yemen and the lifting of the blockade.’ ”

The wider regional and global implications of the war remain significant.

If Iran is intent on arming the rebels – a claim which is as yet unsubstantiated – it will be impossible for the West to bring diplomatic pressure to bear on them while Saudi Arabia interferes in the internal affairs of another sovereign nation without any kind of mandate.

The U.S. appears to have lost a degree of control over its main Arabian ally, the New York Times reports.

“‘Once your clients have a quasi-independent military capacity, you lose some control over them,’ said F. Gregory Gause III, a Middle East specialist at Texas A&M University’s Bush School of Government and Public Service.”

The narrow Gulf of Aden is a potential flash-point between the Iranian and U.S. navies. It could also be a flashpoint between the Saudi and Iranian militaries.

Thus far the Chinese media have shown no clear support for either side. But China is concerned by unfolding events in the Gulf region. President Xi called King Salmon of Saudi Arabia over the weekend, urging for a political solution to the crisis.

Russia Today has described the Saudi’s operation as being about “chaos and violence and genocide” in Yemen. Iran’s Press TV has emphasises the illegal nature of the Saudi’s actions and the the blatant use of violence to restore power to their ally, former President Abd Rabbuh Mansur Hadi, in a sovereign nation.

The new flashpoint comes at a time when ISIS is becoming a new and volatile force in the unstable region. Instability and chaos is a recipe for higher oil prices in the long term.

The Saudi bombing of Yemen is another flash point and will deepen tensions between the U.S., NATO allies and Russia and indeed China. Geopolitical risk remains high and the region remains a powder keg that is likely to explode as has already been seen in Syria and much of North Africa.

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Today’s AM LBMA Gold Price was USD 1,187.75, EUR 1,107.92 and GBP 792.31 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,202.40, EUR 1,113.44 and GBP 799.19 per ounce.

 Gold fell 1.25 percent or $15.00 and closed at $1,186.80 an ounce yesterday, while silver slipped 1.37 percent or $0.22 closing at $15.79 an ounce.


Silver in US Dollars – 10 Years

Strong U.S. housing data sent spot gold in Singapore below the $1,200 an ounce level in its largest drop in a month. U.S. home resales surged to its highest figure in 18 months. There has been six consecutive months of home sale increases. This data may prompt investors to revisit the possibility of a June Fed interest rate hike.

The U.S. FOMC has a policy meeting next week April 28-29th. The dollar also strengthened which weighed on the yellow metal. A large bullion price drop often triggers technical selling.

The Greek debt crisis still looms over the precious metals market and supports safe haven bids for bullion.

In London in late morning trading gold is flat at $1,189.00. Silver is up 0.30 percent at $15.88. Platinum is down 0.35 percent at $1,128.00.



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