LONDON, June 13 (Reuters) - German government bond

yields fell to their lowest level in over three months on

Friday, benefiting from a surge in investor appetite for safe

haven assets after Israel launched widescale strikes against

Iran.

German 10-year Bund yields fell 4 basis points

(bps) to 2.44%, having marked a session low of 2.422%, the

lowest since March 3. Yields on the two-year Schatz

dropped 1.5 bps to 1.80%.

Longer-dated 30-year German debt performed the

strongest, falling 4.5 bps to 2.91%, flattening the curve.

Bund yields were also set for their largest weekly decrease

since late March, with a decline of 13 bps.

Euro zone bond prices rose, pushing yields lower, in line

with gains in gold and the U.S. dollar.

French 10-year yields fell 2.4 bps to 3.162%,

while Italian 10-year yields underperformed,

dropping 1.5 bps to 3.40%, but hitting their lowest since

December at 3.398%.

On the supply front, Sweden is due to auction new debt.